please show calculation thank you

However, with two products the CEO thought that a new method might be needed for product costing and for determining product profitability. Consequently, your consulting firm was engaged. After reviewing Exhibits 1 and 2 and understanding the CEO's concerns, you real- ized that more cost information is needed, and you in detail asked for and received the information contained in Exhibits 3, 4, 5. Exhibit 1 Income Statements for Traditional and Airtight Stove June 30 ($ 000s) REVENUE $18,500 COST OF GOODS SOLD Direct materials Direct labour 6,800 Factory overhead 2,400 5,800 _15,000 GROSS PROFIT 3,500 SELLING AND ADMINISTRATION Selling 1,200 Administration 1,000 2,200 NET INCOME BEFORE TAXES $ 1,300 Exhibit 2 Profitability Analysis, Per Stove Traditional Stove Airtight Stove Revenue $1,000,00 $3,500.00 Cost of goods sold" 937.50 937-50 Gross margin $ 62.50 $2,562.50 * $15,000,000/16,000 Exhibit 3 Direct Costs Per Stove Traditional Stove Airtight Stove $800 Direct materials $400 8 hours of unskilled labour at 24 hours of skilled labour at Direct labour $25 per hour $15 per hourSBS Books SBS is one of North America's largest book retailers. In the early 1980s it was formed by the amalgamation of two established booksellers that had 90 stores in regional malls. Subsequently SBS expanded into a wider variety of retail outlets. There are now 27 superstores, 800 mall stores, and 85 campus bookstores. The mall stores are 4,000 to 5,000 square feet each. They are all profitable, but they have little chance of above-average growth. The campus stores are less profitable, but with average profitability they provide advertisement for SBS's other stores. It is the superstores that Dino Giovanni, the president and chief executive officer, expects to provide SBS's growth during the next decade. He is so confident that he changed the firm's name to SBS (for Superbook Stores). And in the last two years, he has experimented with a number of concepts to make the superstores exciting places to be and thereby attractive to customers. Dino's superstore idea calls for 40,000 square foot destination book stores. Books are sold at discounts of 10 to 40 percent, and each store may have a many as 100,000 titles. Variations to the base store that have been tested include a juvenile book sec- tion, a children's book section, a children's activity centre with supervised baby sitting, a restaurant, and an espresso bar. Although stores will vary because of the exact loca- tion and premises, the following describes the envisaged superstore: sq. ft. Base store 27,000 Juvenile section increment 4,000 Children's section increment 3,000 Children's activity centre 1,500 Restaurant 3,000 Espresso bar 1,500 40,000 Real estate is purchased and/or developed to superstore specifications, and then sold to various pension funds. These properties are, in turn, rented. The belief is that SBS can earn above-average return as a book retailer, but property ownership can only yield average returns. Moreover, SBS does not want to tie up its limited financial resources in real estate.Restaurant $ 525,000 nations Sales Food, supplies 210,000 Wages, administration, rent, utilities 400,000 Operational income $ (85,000) The average bill was $9 per customer. On average each of these custom- ers was found by a survey to have bought $10 worth of books strictly because of the restaurant. The variable costs of these books are 70 per- cent of the sales value. stanqurags time 1091 mill Espresso Bar Sales in nood avail une $ 300,000 Food, supplies With beurencortez SH Dos 97912 band 90,000 uo @ Wages, administration, rent, utilities announces 260,000 To Swim Operational income andimmoun grigolior $ (50,000) The average bill was $6 per customer. On average each of these custom- ers was found by a survey to have bought $15 worth of books strictly because of the espresso bar. The variable costs of these books are 70 per- cent of the sales value. Required As the corporate management accountant, perform the duties assigned by the president. Use the case approach for this assignment. nolload