Regular Company produces audio equipment, specifically headphones and speakers. A new CEO has just been hired and

announces a new policy that if a product cannot earn a markup of at least $25$ percent, it will be dropped. The markup is

computed as product gross profit divided by reported product cost.

Manufacturing overhead for year $1$ totaled $$972,000.$ Overhead is allocated to products based on direct materials cort. Dat

year $1$ show the following:

Required:

a$-1.$ Calculate the markup for both headphones and speakers.

a$-2.$ Based on the CFO's new policy, which of the two products should be dropped?

b$.$ Regardless of your answer in requirement $($a$),$ the CFO decides at the beginning of year $2$ to drop the speakers from the

product line. The company cost analyst estimates that overhead without the speaker line will be $$610,000.$ The revenue and

costs for headphones are expected to be the same as last year. What is the estimated markup for headphones in year $2?$

Complete this question by entering your answers in the tabs below.

Req A$1$

Req B

Calculate the markup for both headphones and speakers. $($Enter your answers as a percentage rounded to $1$ decimal place

$($i$.$e$.,32\mathrm{.}1).)$