Exercise $9-28($Algo$)$ Plantwide versus Department Allocation $($LO $9-2,3)$

Edlie Accessories $($EA$)$ makes travel bags, both for sale under their own label $("$Branded$")$ and for other resellers to put their label on the bags $("$Private$-$Label"$).$ The bags sold through the two channels are similar, but they differ slightly in the quality of materials and detail in the manufacturing process.

The manufacturing plant at EA has two departments. Department A$-101$ was the original manufacturing facility and many of the machines are original. Department A$-102$ is new, with state$-$of$-$the$-$art equipment. The new equipment facilitates the additional care taken with the Branded product.

The following information presents financial results for the two models from last year:

The product costing system at EA allocates manufacturing overhead on the basis of direct labor costs.

Required:

a$.$ Compute the profit or loss for each product using plantwide allocation.

b$.$ Compute the profit or loss for each product using department allocation.

Note: For all requirements, loss amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers rounded to the nearest whole number.