Garden Enclosures, Inc., makes metal gates. The company has three product lines—standard, deluxe, and custom gates. Garden Enclosures integrates its service department allocation system with its ABC system. There are two service departments—power and facilities management. Garden Enclosures allocates its two service department costs to the processing department using the direct method based on megawatt hours and machine hours consumed. There are two activity centers in the processing department—setup/maintenance and assembly. Parts and assembly labor are traced directly to each product. Setup/maintenance costs are allocated based on number of setups, and assembly costs are allocated based on machine hours.

Data for a recent reporting period follow:

Prepare a schedule that calculates the gross profit available to cover other value-chain costs for each product and Garden Enclosures as a whole company.

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Product Line Standard 100,000 20 $1,003,800 S298,000 20 1,000 Deluxe Units produced and sold Sales price per unit Total parts costs Total direct-labor costs Setups Machine hours in assembly 10,000 $ 50 S115,080 72,000 12 400 Custom 1,000 $ 250 $15,980 $68,000 100 Activity Centers' Use of Driver Unit Setup/ Total Cost Driver Unit Maintenance Assembly S90,000 Resource/Department 97% Assembly supervisors Assembly machines Facilities management departme Power department 3% S247,000 Machine hours S95,000 Machine hours Megawatt hours 400 400 10 1,500 1,500 80 S 54,000