Refer to the information about Claire Company in Problem 7-20. Other information is as follows: Claires managers

Refer to the information about Claire Company in Problem 7-20.

 Other information is as follows:

 Claire’s managers have gathered the following information about selling and administrative costs.

Required

a. Using the information given here and in Problem 7-20, calculate the product margin per unit for Tablets and Books using the traditional costing system.

b. Prepare a report like the one in Exhibit 7-12, Panel A.

c. Using the information given here and in Problem 7-20, calculate the product margin per unit for Tablets and Books using the activity-based costing system. Be sure to include selling and administrative costs.

d. Prepare a report like the one in Exhibit 7-12, Panel B.

e. Based on your analysis, what actions might the managers consider taking to improve the profitability of Books and of the company overall?

Transcribed Image Text:

Cost Driver Number of units Machine hours Change orders None Activity Pool Binding Printing Product design General Total overhead costs Department Costs $ 247,500 796,250 195,000 606,250 $1,845,000