Seved 1 McNulty, Inc. produces desks and chairs. A new CFO has just been hired and announces a new policy that if a product cannot eam a margin of at least 20 percent, it will be dropped. The margin is computed as product gross profit divided by reported product cost. Manufacturing overhead for year 1 totaled $645,000 Overhead is allocated to products based on direct labor cost. Data for year show the following Chairs $1,046,500 $1,950,000 Direct materials $10.000 Direct labor 130,000 Desks Sales revenue 585.000 100.000 Required: 0-1. Based on the CFO's new policy, calculate the profit margin for both chairs and desks 0-2. Which of the two products should be dropped? b. Regardless of your answer in requirements, the CFO decides at the beginning of year 2 to drop the chale product. The company cost analyst estimates that overhead without the chairline will be $660.000. The revenue and costs for desks are expected to be the same as last year. What is the estimated margin for desks in year 2? Complete this question by entering your answers in the tabs below. Req A1 Reg AZ Reg Based on the CFO's new policy, calculate the profit margin for both chairs and desks Profit Margin Chairs Dosks