Required: a) allocate the shared fixed costs ($17500) among Basic and Premium u

Required: a) allocate the shared fixed costs ($17500) among Basic and Premium using direct labor dollars as the allocation basis (hint: notice that the direct labor
numbers above are per unit. To do the allocation you will have to compute the total amounts of direct labor $ used by each product line).
allocation rate = $___________________ per DL$
FC allocated to Basic = $__________________ (total not per unit)
FC allocated to Premium = $_________________ (total not per unit) b) using the allocated costs from (a) compute the profit margin for each product line.
profit margin for Basic = $_____________________
profit margin for Premium = $__________________ Additional information for c)-d) below: You are thinking of changing the product mix to 350 units of Basic 700 units of Premium. This is a long-term change. c) Estimate the fixed costs (capacity costs) for the new product mix. Use direct labor $ as the allocation basis.
(hint: Compute the allocation rate using the original product mix. After that multiply by the new amounts of the cost driver.)
allocation rate = $___________________ per DL$
FC allocated to Basic = $_____________
FC allocated to Premium = $__________ d) Compute the profit margin for Basic and Premium for the new product mix.
profit margin for Basic = $______________________
profit margin for Premium = $___________________
Is it a good idea to change the product mix? (enter 1=yes 2=no) _________________