Eagle Distributing has three operating units and three support departments. Clint, the company manager, is trying to analyze the profitability of the three operating units. Clint has narrowed it down to using the step method of allocating costs. First, however, he is trying to figure out the best way to rank the support departments. Information for the company follows: Instructions:
a.Allocate the support department costs to the operating units using the step method of allocating costs if the departments are ranked based on the highest costs.
b.Allocate the support department costs to the operating units using the step method of allocating costs if the support departments are ranked based on the percentage of services they provide to other support departments
c.Revenue earned by the shipping, packing, and receiving operating units was $960,000, $1,300,000, and $620,000, respectively. Compute the gross margin, operating income, gross margin percentage, and profit margin percentage using the information calculated in parts (a) and (b). (round your percentages to the nearest whole percent)

Question

Eagle Distributing has three operating units and three support departments. Clint, the company manager, is trying to analyze the profitability of the three operating units. Clint has narrowed it down to using the step method of allocating costs. First, however, he is trying to figure out the best way to rank the support departments. Information for the company follows:  Instructions: 
a.Allocate the support department costs to the operating units using the step method of allocating costs if the departments are ranked based on the highest costs.
b.Allocate the support department costs to the operating units using the step method of allocating costs if the support departments are ranked based on the percentage of services they provide to other support departments
c.Revenue earned by the shipping, packing, and receiving operating units was $960,000, $1,300,000, and $620,000, respectively. Compute the gross margin, operating income, gross margin percentage, and profit margin percentage using the information calculated in parts (a) and (b). (round your percentages to the nearest whole percent)

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The Answer of Eagle Distributing has three operating units and three support departments. Clint, the company manager, is trying to analyze the profitability of the three operating units. Clint has narrowed it down to using the step method of allocating costs. First, however, he is trying to figure out the best way to rank the support departments. Information for the company follows:  Instructions: 
a.Allocate the support department costs to the operating units using the step method of allocating costs if the departments are ranked based on the highest costs.
b.Allocate the support department costs to the operating units using the step method of allocating costs if the support departments are ranked based on the percentage of services they provide to other support departments
c.Revenue earned by the shipping, packing, and receiving operating units was $960,000, $1,300,000, and $620,000, respectively. Compute the gross margin, operating income, gross margin percentage, and profit margin percentage using the information calculated in parts (a) and (b). (round your percentages to the nearest whole percent)

Eagle Distributing Has Three Operating Units and Three Support Departments