Empire Furniture company has two major product lines with the following characteristics:Commercial office furniture: Few large orders, little advertising support, shipments in full truckloads, and low handing complexityHome office furniture: Many small orders, large advertisement support, shipments in partial truckloads, and high handling complexityThe company produced the following profitability report for management:

The selling and administrative expenses are allocated to the products on the basis of relative sales dollars.Evaluate the accuracy the accuracy of this report and recommend an alternative approach.

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Office Comfort Furniture Company Product Profitability Report For the Year Ended December 31, 2012 Commercial Home Office Office Furniture Furniture Total $4,000,000 $2,000,000 $6,000,000 Revenue Cost of goods sold 700,000 2,200,000 1,500,000 Gross profit $2,500,000 $1,300,000 $3,800,000 Selling and administrative expenses 1,200,000 600,000 1,800,000 $ 700,000 $1,300,000 Income from operations $2000,000