McClellan Recreation manufactures and sells two models of paddle boards: Starter and Pro. The Starter model is a basic board used

for instruction and purchased by novices. The Pro model is made with premium materials and comes with several accessories. The

boards are produced to order, and there are no inventories at the end of the year.

The cost accounting system at McClellan allocates overhead to products based on direct labor cost. Overhead in year $1,$ which just

ended, was $$2,380,000.$ Data on units sold for year $1$ along with the unit sales price and unit direct costs for the two models follow:

Required:

a$.$ Compute product line profits or loss for the Starter model and the Pro model for year $1.$

b$.$ A study of overhead shows that without the Starter model, overhead would fall to $$1,400,000.$ Assume all other revenues and costs

would remain the same for the Pro model in year $2.$ Compute product line profits$/$loss for the Pro model in year $2$ assuming the

Starter model was not produced or sold.

Complete this question by entering your answers in the tabs below.

Compute product line profits or loss for the Starter model and the Pro model for year $1.$

Note: Loss amounts should be indicated by a minus sign.