Product A             Product B

                                 

Estimated sales (units)                       5,000                   2,000

Selling price per unit                            $ 8.00              $ 15.00

Purchase price per unit                      $ 2.00              $   6.00

Freight in per unit                                 $ 1.00              $   1.00

The total production overhead is $ 200,000 and 7% is allocated against products A and B. The allocation of this overhead is further divided on the basis of number of units sold.

Administrative overhead amounts to $ 70,000 and 10% of this overhead is allocated against products A and B. The allocation of this overhead is further divided on the basis of revenue.

Total profit margin before overhead allocation is ________________________ .

Answer rating: 100% (QA)

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