Fleet Street Inc., a manufacturer of high-fashion clothing for women, is located
ID: 2610128 • Letter: F
Question
Fleet Street Inc., a manufacturer of high-fashion clothing for women, is located in South London in the UK. Its product line consists of trousers (28%), skirts (34%), dresses (15%), and other (23%). Fleet Street Inc. has been using a volume-based rate to assign overhead to each product; the rate it uses is £2.50 per unit produced. The results for the trousers line, using the volume-based approach, are as follows:
Recently, it has 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
Fleet Street Inc., a manufacturer of high-fashion clothing for women, is located in South London in the UK. Its product line consists of trousers (28%), skirts (34%), dresses (15%), and other (23%). Fleet Street Inc. has been using a volume-based rate to assign overhead to each product; the rate it uses is £2.50 per unit produced. The results for the trousers line, using the volume-based approach, are as follows:
Explanation / Answer
Calculation of Profit Margin :-
Particulars Amount in GBP Amount in GBP Total Revenue (10000unit * 29.75) (A) 297500 Less : Total Product Cost :- Direct Materials 48900 Pattern Cutting 32650 Grading 28200 Lay planning 27500 Sewing 31200 Finishing 21200 Inspection 9600 Boxing up 5200 Storage 10400 Total Product Cost 214850 Less : Non Manufacturing Expenses 44200 Total Cost (B) (214850+44200) 259050 Profit Margin (A - B) 38450Related Questions
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