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Fleet Street Incorporated a manufacturer of high-fashion clothing for women, is located in South London...

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Accounting

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Fleet Street Incorporated a manufacturer of high-fashion clothing for women, is located in South London in the UK. Its product line consists of trousers (25%), skirts (33%), dresses (14%), and other (28%). Fleet Street has been using a volume-based rate to assign overhead to each product the rate it uses is 2.61 per unit produced. The results for the trousers line using the volume based approach, are as follows Number of units produced 13,000 Price (all figures in E) 29.23 Total revenue 379,990 Direct materials 62,500 Direct labor 208,600 Overhead (volume-based) 33930 Total product cost 305,030 Nonmanufacturing expenses 57.100 Total cost 362130 Profit margin for trousers 17,860 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: Pattern cutting Grading Lay planning Sewing Finishing Inspection Boxing up Storage 39, 470 33,700 32,500 37,800 25,000 11,300 6,100 12,200 Required: 1. Determine the profit margin for trousers using ABC. Pro margin

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