Chrome File Edit View History Bookmarks People Tab Window Help Fri Jul 30 8:04 AM Question XM MHE Rea M blah-jfs x | Focus T2 Memphis X Memphis X MMM at x Big Carte X UofMon Grades - X Course H X + ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/a... Help Save & Exit Submit Ch. 9 Required Assignment (Graded) Saved 3 McNulty, Inc., produces desks and chairs. A new CFO has just been hired and announces a new policy that if a product cannot earn a margin of at least 20 percent, it will be dropped. The margin is computed as product gross profit divided by reported product cost. 2 points Manufacturing overhead for year 1 totaled $1,005,000. Overhead is allocated to products based on direct labor cost. Data for year 1 show the following. eBook Print Sales revenue Direct materials Direct labor Chairs $1,212,100 604,000 180,000 Desks $2,781,250 1,000,000 490,000 References Mc Graw Hill Required: a-1. Based on the CFO's new policy, calculate the profit margin for both chairs and desks. a-2. Which of the two products should be dropped? b. Regardless of your answer in requirement (a), the CFO decides at the beginning of year 2 to drop the chair product. The company cost analyst estimates that overhead without the chair line will be $850,000. The revenue and costs for desks are expected to be the same as last year. What is the estimated margin for desks in year 2? Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B Based on the CFO's new policy, calculate the profit margin for both chairs and desks. Profit Margin 1% Chairs 7,550 JUL 30 < Prev 3 of 5 Next > tv A W Check my work M M