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Required information [ The following information applies to the questions displayed below. ] Ferry Electronics produces a wide variety of video and audio systems for

Required information
[The following information applies to the questions displayed below.]
Ferry Electronics produces a wide variety of video and audio systems for home entertainment. One of the Ferry plants
(Lakeview) produces home theatre systems. The plant produces three models, Silver, Gold, and Platinum, which differ in
the quality of the components and capability to "fill" the room with sound.
The financial team at Ferry is completing the planning for the coming quarter. Information on volumes and costs expected
for the quarter follow:
The team has been discussing two issues. First, there is disagreement about how best to allocate the manufacturing
overhead among the products. The current cost accounting system allocates manufacturing overhead to products based
on expected unit sales. (Because Ferry carries no inventory, unit sales are equal to units produced.) Second, there is a
concern about a "softening" in the demand for these systems and the managers at Ferry want to get a better
understanding of possible financial implications if demand should be weaker than expected.
The finance team decides that a two-stage system might improve the information available for management. They do an account
analysis and determine that there appear to be two main drivers of overhead: revenue and direct costs. Based on the account analysis,
the team splits the manufacturing overhead into two pools as follows:
d. Compute total and per-unit profits by product line based on the expected (not breakeven) sales by product line using the two-stage
cost allocation system developed by the finance team.
Note: Do not round intermediate calculations. Negative amounts should be indicated by a minus sign. Round "Unit profit (loss)"
answers to 2 decimal places. Round your "Total profit (loss)" answers to nearest whole dollar.
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