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Product A Product B Total sales volume (units) 360 200 560 Revenue $8,000 $48,000 $56,000 Variable costs: direct materials $1,600 $3,200 $4,800 direct labor
Product A Product B Total sales volume (units) 360 200 560 Revenue $8,000 $48,000 $56,000 Variable costs: direct materials $1,600 $3,200 $4,800 direct labor $3,200 $8,000 $11,200 Contribution margin $3,200 $36,800 $40,000 Fixed costs Profit $33,600 $6,400 a) Allocate the fixed costs between products A and B. Use direct labor dollars as the cost driver. allocation rate=$ allocated costs for A=$ allocated costs for B=$ per DL$ b) Compute the profit margins for products A and B: profit margin for A=$ profit margin for B=$ Enter negative numbers with a minus sign, i.e., a loss of $1,000 should be entered as -1000, not as (1000) or ($1000).
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