Office Comfort 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 handling complexity Home office furniture: Many small orders, large advertising support, shipments in partial truckloads, and high handling complexity
The 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 of this report and recommend an alternativeapproach.

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Office Comfort Furniture Company Product Profitability Repont For the Year Ended December 31, 2010 Commercial Office Funiture $3,600,000 1,500,000 $2,100,000 1,200,000 $ 900,000 Home Office Furniture Total Revenue Cost of goods sold Gross profit Selling and administrative expenses Income from operations $1,800,000 $1,100,000 S 500,000 $5,400,000 2,200,000 $3,200,000 1,800,000 $1,400,000 700,000 600,000