Fleet Street Incorporated a manufacturer of highfashion clothing for women, is located in South London in the UK Its product line consists of trousers skirts dresses and other Fleet Street has been using a volumebased rate to assign overhead to each product; the rate it uses is per unit produced. The results for the trousers line, using the volumebased approach, are as follows:
tableNumber of units produced,Price all figures in Total revenue,Direct materials,Direct labor,Overhead volumebasedTotal product cost,Nonmanufacturing expenses,Total costProfit margin for trousers,
Recently, Fleet Street conducted a further analysis of the trousers line of product, using ABC. In the study, eight activities were identified, and direct labor was assigned to the activities. The total conversion cost labor and overhead for the eight activities, after allocation to the trousers line, is as follows:
tablePattern cutting,
