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MCS distributes many products to retail accounts but classifies products into just two product groups-footwear and equipment. - Footwear items arrive at MCS in cases
MCS distributes many products to retail accounts but classifies products into just two product groups-footwear and equipment. - Footwear items arrive at MCS in cases and are shipped to customers in these cases. - MCS receives equipment in bulk shipments. MCS must unpack these products and then repack them to meet small order quantities for specific equipment. Examples include weight-training equipment and golf clubs and bags. MCD has two types of customers: 1. Specialty stores: stores that order low volumes, the majority being footwear 2. Department stores: stores that order large volumes of both footwear and equipment Meadow Cities Sports (MCS) is a distributor of sports footwear and equipment. (Click the icon to view product and customer type information.) MCS's management has set a strategic goal to improve both product and customer profitability. A related subgoal that supports this strategy is to identify profitable products and customers using an accurate cost-accounting system. MCS currently uses a simple cost-accounting system to calculate both product and customer profitability. The only direct costs are the purchase costs of footwear and equipment products. MCS allocates indirect costs to the product groups using a single indirect cost pool for all indirect costs with "pounds of product" as the cost allocation base. Cost and operating data accumulated for the most recent year follow: (Click the icon to view the cost and operating data.) Read the requirements. Requirement 1. Prepare a schedule that shows the gross margin of each product group. Requirement 2. Prepare a schedule that shows the gross margin of each customer type. (Round gross margin per case amounts to the nearest cent.)
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