Cable Tech Bell (CTB) operates in the telecommunications industry. te CTB the Phone Division and the Cable Service The manufactures TV several plants located in the Midwest. The product lines run from relatively a cable an and desk phones to expensive, high-quality cellular phones. CTB also operates Ohio. The Cable Service Division offers three products: a basic with channels, channels and two movie package, which is the basic package plus 15 additional channels and three movie mium package, which is the basic package plus 25 additional for the month of March: The Cable Service Division reported the following activity anced Premium Enl Basic 300,000 50,000 Sales (units) $16 Price per unit Unit costs: 7 3 Directly traced 6 2 Driver traced $13 $15 $10 Allocated The unit costs are divided as follows: 70 percent production and 30 percent marketing and service. Direct labor cost is the only driver used for the division uses at the reque costs costs. The preceding unit product cost information was provided the marketing manager and the result of a special study. Bryce Youngers, the president of CTB, is reasonably satisfied with the performance of the ca Service Division. performance is fairly typical of what has been happening over the The Division, howeve another matter. Its overall profit performance has been de years ago, income before income taxes had been about 25 percent of sales. March's performance was also typical for what has been happening this year and is expected to contin unless some action by management is taken to reverse the trend. During March, the Phone Div reported the following results: Inventories: Materials, March 1 23,000 Materials, March 31 Work in process, March 1 130,000 Work in process, March 31 45,000 Finished goods, March 1 480,000 Finished goods, March 31 375,000 Direct labor 7,000 Plant and equipment depreciation Materials handling 85,000 Inspections Scheduling 30,000 Power 30,000 Plant supervision 12,000