Question
Susan Delaney analyzes product profitability of one of her clients using the following data: 2013 2014 2015 Overhead costs 110,000 120,000 100,000 Direct labor 25,000
Susan Delaney analyzes product profitability of one of her clients using the following data:
2013 | 2014 | 2015 | |
Overhead costs | 110,000 | 120,000 | 100,000 |
Direct labor | 25,000 | 30,000 | 20,000 |
She is particularly interested in profitability of Product 1, which had its sales price and costs per unit unchanged during these years at:
Product1 | |
Sales price (per unit) | 118 |
Direct material cost | 19 |
Direct labor cost | 10 |
For financial reporting purposes, overhead is allocated to products based on direct labor costs using actual overhead rates that vary from year to year. The net operating profit margin is defined as sales minus full product costs (labor, material, and allocated overhead costs). Here it means dollars of profit per product, NOT profit margin as a percentage of sales. What was the net operating profit margin of Product 1 in 2015?
Enter your answer as a number rounded to two decimal points, e.g., 3.14, 25.70, 100.00, 1540.99. Do not enter any letters, unit symbols (such as %), commas, or other non-numerical characters!
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