Question: Moving materials from the loading dock to the warehouse and then to the sales floor was a costly, time-consuming process. To date, though, Donald had
Moving materials from the loading dock to the warehouse and then to the sales floor was a costly, time-consuming process. To date, though, Donald had not been allocating these costs to the company's different product segments. Instead, the segments were evaluated based on their gross margin percentage only. He decided to calculate a material move cost that could be assigned to the segments based on how much time workers spent moving the raw materials around the facility. This rate was $40 per hour. Each segment's gross margin, gross margin percentage, and usage of moving hours are as follows. Grocery Household Lawn and Garden Gross margin $255,000 $405,000 $472,500 GM percentage 30% 30% 35% Moving hours used 4,400 2,600 1,900 After allocating these costs to the segments, would Donald view any of these segments differently? (Round answers to 2 decimal places, e.g. 15.25%.) Grocery Household Lawn and Garden New gross margin percentage % % % Donald view some of these segments differently
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