Topic: Application of ABC for Allocation of Operating Expenses for Profitability Analysis Type: FMB 27) Westvaco Inc. has two divisions. Currently $400,000 factory overhead cost is allocated to divisions based on a plant-wide overhead rate based on direct labor cost. The following data pertains to the two division: Foods Division Goods Division Sales Direct materials $450,000 $550,000 (75,000) (150,000) Direct labor (150,000) (150,000) An ABC study revealed that the number of batches and product lines are the drivers of company's factory overhead costs at Westvaco Inc. The breakdown of its total manufacturing overhead cost of $400,000 is a mixture of batch-level and product line costs. Following information has been assembled regarding overhead. Foods Division Goods Division Total Overhead Batch-level overhead Product line-level overhead $250,000 $150,000 12 batches 10 lines 38 batches 30 lines Example of Answer: 8.50% or -8.50% Two decimal points, no comma, space, or $ sign. Use minus for negative percentage Gross profit ratio for Food division under current plant-wide overhead rate [ ] Compute gross profit ratio for Goods division under current plant-wide overhead rate = [ ] Gross profit ratio for Food division under Activity Based Costing [ Gross profit ratio for Goods division under Activity Based Costing =[ Based upon your overall analysis, is Food Division profitable? [ ] ] ]