Fleet Street Inc a manufacturer of highfashion clothing for

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

Solution

Calculation of Profit Margin :-