Airco’s managers were surprised by

Airco’s managers were surprised by the fact that 55% [($1,560,027+ $877,107)/$4,458,605] of its overhead resources were consumed by the material handling and raw material receiving activities. They responded by reducing the raw material and part transport distances within the facility. In addition, they compared the traditional and ABC product margin percentages (computed by dividing each product’s margin by the sales of the product) for the company’s seven product lines of air conditioners as summarized below;