Refer to the information about Voss Visuals in Problem 7-20. Voss'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:

Activity Pool Total Cost Shipping Advertising Commissions Cost Driver $240,000 Ponds shipped 168,125 5% of sales price 57,500 Number of mailings Total selling and administrative costs $565,625 Weight Advertising mailings Sales commission Selling price per unit Tablets 20,000 pounds 125,000 5% of sales price $35 Books 40,000 pounds 100,000 5% of sales price $75