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Ken Yalters, the COO of FreshSkin, asked his cost management team for a product line profitability analysis for his firm's two products - Askin and
Ken Yalters, the COO of FreshSkin, asked his cost management team for a product line profitability analysis for his firm's two products - Askin and Bskin. The two products are skin care products that require a large amount of research and development and advertising. He received the report below. Ken concluded that Askin was the more profitable product and that perhaps cost-cutting measures should be applied to the Bskin product. Askin $ 4,018, 088 (2,629,000) $ 1,499,000 Bskin $ 2,609,000 (2,118,000) $ 491,080 Sales Cost of goods sold Gross profit Research and development Selling expenses Profit before taxes Total $ 6,627, eee (4,727, eee) $ 1,900, eee (1,188, eee) (139, eee) $ 573, 800 Seventy-five percent of the research and development and selling expenses were traceable to Askin. Profit before taxes for the Askin product, per ilfe-cycle income statements, is: Multiple Choice $321250 $413,750 $511.250. $196,250
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