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To illustrate the source of the distortions to senior management, Jean collects the cost data for the three products, Almond Dream, Krispy Krackle, and Creamy
To illustrate the source of the distortions to senior management, Jean collects the cost data for the three products, Almond Dream, Krispy Krackle, and Creamy Crunch. CBI recently adopted a general policy to discontinue all products whose gross profit margin percentages [(Gross margin Selling price )100] were less than 10 percent. By comparing the selling prices to the firm's costs and then calculating the gross margin percentages, Jean could determine which products, under the current cost system, should be dropped. The current selling prices of Almond Dream, Krispy Krackle, and Creamy Crunch are \$85, \$55, and \$35 per case, respectively. Overhead will remain $69,500 per month under all alternatives
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