Stock Stuffed Animals Custom Stuffed Animals Sales $7,500,000 $5,000,000 Less direct costs 2,500,000 4,000,000 Less allocated costs 3,375,000
REQUIRED
b. Which provides the best information on profitability: a single overhead cost pool with headcount as the allocation base, or multiple cost pools using headcount, sales, and space occupied?
- Attachment 1
- Attachment 2
Stock Stuffed Animals Custom Stuffed AnimalsSales$7,500,000$5,000,000Less direct costs2,500,0004,000,000Less allocated costs3,375,0001,125,000Income (loss) before taxes $1,625,000($ 125,000)