McNulty, Inc. produces desks and chairs. A new CFO has just been hired and announces a new policy that if a product cannot eam a margin of at least 45 percent, it will be dropped. The margin is computed as product gross profit divided by reported product cost Manufacturig overhead for year 1 totaled $1,005,000. Overhead is allocated to products based on direct labor cost Data for year 1 show the following 1 sales revenue Direct materials Direct labor Cha $1,710, 527,000 25e.co 52,970.000 30,000 420,00 Required: 0-1. Based on the CFO's new policy, calculate the profit margin for both chairs and desks -2. Which of the two products should be dropped? b. Regardless of your answer in requirement (c), the CFO decides at me beginning of year 2 10 drop the chair product . The company cost analyst estimates that overhead without the chairline will be 5780,000. The revenue and costs for desks are expected to be the same as last year. What is the estimated margin for desks in year 22 Complete this question by entering your answers in the tabs below. FA Rege Based on the CFO's new policy calculate the profit margin for both chairs and desk WMO Chairs Deths Reg A2 > McNulty, Inc. produces desks and chairs. A new CFO has just been hired and announces a new policy that if a product cannot eam a margin of at least 45 percent. It will be dropped. The margin is computed as product gross profit divided by reported product COSL Manufacturing overhead for year totaled S1005,000 Overhead is allocated to products based on direct labor cost. Data for year 1 show the following Sales revenue Direct material Direct Tabor 51,710,000 $97. 52.970,000 3, 120,000 Required: 6-1. Based on the CFO's new policy, calculate the profit margin for both chairs and desks -2. Which of the two products should be dropped? b. Regardless of your answer in requirement (), the CFO decides at the beginning of year 2 to drop the chair product. The company cost analyst estimates that overhead without the chairline will be 5780,000. The revenue and costs for desks are expected to be the same as last year. What is the estimated margin for desks in year 2? Complete this question by entering your answers in the tabs below. Regal Rog AZ Rego Regardless of your answer in requirement (a), the CFO decides at the beginning of year 2 to drop the chair product. The company cost analyst estimates that overhead without the chairline will be $70,000. The revenue and costs for desks are expected to be the same as fast year what is the estimated margin for desks in year 27 (r your answers para Founded to I decimo bach ) Show 3 Reg A2
