CASE #1 Damili ti Amianan, Inc. manufactures iconic superhero figurines. All figurines are approximately the same size, but some are ceramic and others are fancy, with black leather capes and a metallic armour. Management is considering producing only the fancy figurines because the rate of return on sales is so much higher than it is on the ceramic figurines. The company's total production overhead is $5,017,500. Some additional data follow: Ceramic Fancy Revenues 915,000,000 916,300,000 Direct cost 8,250,000 8,?50,000 Production {u nits] 1,500,000 350,000 Machine hours 200,000 50,000 Direct labor hours 34,500 153,625 Number of inspections 1,000 5,500 Required: a. Damili ti Amianan, Inc. has consistently used machine hours to allocate overhead. Determine the profitability of each line of figurines, and decided whether the company should stop producing the ceramic gurines. b. The cost accountant has determine that production overhead cost can be assigned to separate cost pools. Pool #1 contains 91,260,000 of overhead cost of which the most appropriate cost driver is machine hours; Pool #2 contains P2,25?,500 of overhead costs for which the most appropriate cost driver is direct labor hours; and Pool #3 contains 91,500,000 of overhead cost of which the most appropriate cost driver is number of inspections. Compute the overhead cost that should be allocated to each type of figurine using this methodology. c. Discuss what management decision should be