Question 1 (cost allocation, product profit margin, killing products in the long term) Use the following contribution margin statement:

	Product A	Product B	Total
sales volume (units)	200	360	560
Revenue	$48,000	$288,000	$336,000
Variable costs:
direct materials	$9,600	$19,200	$28,800
direct labor	$19,200	$48,000	$67,200
Contribution margin	$19,200	$220,800	$240,000
Fixed costs			$201,600
Profit			$38,400

Required: (a) allocate the shared fixed costs ($201,600) among product A and product B, using direct labor dollars as the allocation basis. allocation rate=$ per DL$ FC allocated to A=$ FC allocated to B=$ (b) using the allocated costs from (a), compute the profit margin for product A and product B. If you get a negative number, enter it with a minus sign, i.e., enter negative $1000 as -1000, not as ($1000) profit margin for A=$ profit margin for B=$ c) based on the profit margins from (b), should you kill product A or product B in the long term? Explain your decision.

d) allocate the shared fixed costs ($201,600) among product A and product B, using the number of units as the allocation basis. allocation rate=$ per unit FC allocated to A=$ FC allocated to B=$