Luke Corp calculates its product margins including a share of corporate costs. One product, Bubbs, currently...

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Luke Corp calculates its product margins including a share of corporate costs. One product, Bubbs, currently sells for $8.50 per case. In the most recent year 2.33 million cases were sold Under the current allocation method, corporate costs ($10.5 million in the current budget) are assigned to products at a rate of 10% of revenues Assure your estimates of the corporate costs suggest that corporate costs have a variable component equal to 5% of revenues and an annual fixed component of $4,500,000 What would be your estimate of the corporate costs that should be allocated to Bobbs using this alternative approach? You should assume that 12% of corporate fixed costs are allocated to Bubbs Luke Corp calculates its product margins including a share of corporate costs. One product, Bubbs, currently sells for $8.50 per case. In the most recent year 2.33 million cases were sold Under the current allocation method, corporate costs ($10.5 million in the current budget) are assigned to products at a rate of 10% of revenues Assure your estimates of the corporate costs suggest that corporate costs have a variable component equal to 5% of revenues and an annual fixed component of $4,500,000 What would be your estimate of the corporate costs that should be allocated to Bobbs using this alternative approach? You should assume that 12% of corporate fixed costs are allocated to Bubbs

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Under the current allocation method the corporate costs allocated to Bubbs can be calculated as foll... View the full answer