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Exhibit 2 Product Profitability Analysis March 2000 Geoffrey Doll Specialty Branded Doll 106 Cradles Direct labor cost $ 300 375 750 Direct material cost $ 500 600 1200 Manufacturing

Exhibit 2 Product Profitability Analysis
(March 2000)

Geoffrey Doll
Specialty-Branded
Doll #106
Cradles

Direct labor
cost ($)
3.00
3.75
7.50

Direct material cost ($)
5.00
6.00
12.00

Manufacturing overheada ($)
11.19
13.99
4.20

Standard unit cost ($)
19.19
23.74
23.70

Selling price ($)
21.00
36.00
30.00

Margin ($)
9%
34%
21%

Source: Casewriter.

aChicago overhead allocation percentage of direct labor cost =
373% ($268,666/$72,000);
Springfield overhead allocation
percentage of direct labor cost = 56% ($12,667/$22,500).

May 01 2020 View more View Less

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