Question 5 of 9 0.31/0.5 E View Policies Show Attempt History Current Attempt in Progress Sunland is a manufacturer that specializes in three types of toy instruments: xylophones, electronic keyboards, and drum sets. Grandparents across the globe flock to stores so they can buy their kids kids these especially nosytoys. Company managers are equally excited about their products and wait the profit report for this year's performance. The following partial income statement was released to all managers last week Xylophone Keyboard Drums Total Sales $503,000 $903.000 $598,000 $2004,000 Cost of goods sold 214.000 439,000 332,000 985.000 Gross margin 289.000 464,000 266,000 Operating expenses Operating income 1019.000 811,360 $207,640 Use: Excel to complete the following (a) Your answer is correct Your answer is correct The company has not previously allocated its operating expenses to the three product lines but wants to do so now. Managers believe operating expenses are incurred in a proportion similar to COGS for each product line. Allocate the operating expenses usinst each product lines proportion of its own COGS to totalCOGS, then determine operating income and proht margin percentage by product line. (Round proportion of total cost of goods sold and profit margin percentage to 2 decimal places es 15.25 Round final answers to O decimal places, es 5.125. Enter loss using either a negative sig preceding the number os 5,145 or -45% or parentheseses (5,145) or (451) Xylophone Keyboard Drums Operating income $ 112725 $ 102389 $ -7474 Profit margin percentage 2241 1134 * e Textbook and Media Attempts: unlimited Question 5 of 9 0.31/0.5 After reviewing the profit report, one product line manager was concerned by how the operating expenses were allocated. He felt that a disproportionate amount was being directed at his product line and requested that the accounting team review these expenses. After doing so, the accounting team observed that while some operating activity usage follows the COGS trend, not all operating activity usage does. The accountants incorporated this new information and prepared the following for product line managers. Cost Xylophone Operating Expense Activities Design $57,000 200 260.500 810 Engineering Selling Quantity of Cost Driver Keyboard Drums 1.100 600 Design hours 2,400 2.000 Engineering hours % of dollar sales 7.000 5,100 Direct labor hours 16 12 Number of employees 180,360 General 240,000 7.900 Administrative 73,500 7 Total operating Expenses $811,360 Based on this updated information, prepare new allocations and profit analysis by product line. Which product line manager(s) will likely prefer this new ABC version of profitability? (Round answers to 2 decimal places, eg. 15.25%) Xylophone Keyboard Drums % 96 36 New profit margin percentage
