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 PrivateLabel" 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 was the original manufacturing facility and many of the
machines are original. Department A is new, with stateoftheart 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.
