1. 'EasyBake Co. creates countertop ovens so easy and safe to use a kid could figure it out! EB Co. has noticed one particular product line looks ready for expansion when allocating costs as per the simple method. EB Co. allocates OH using direct labor hours, as each oven is manufactured manually. EB Co. has contacted you to take a look, and let them know if the success of AlooPie's line is true, or inaccurate OH allocation.

GIVEN: Aloopie Banannapie

Sales price per unit 1,000 800

DM$ per unit 100 50

DLH per unit 4 2

Units produced 1,000 500

Quality checks 50 100 $ 600,000

Design Hrs per line 20 80 $ 100,000

Distribution 1,000 500 $ 100,000

Admin for manufacturing ? ? $ 200,000

$OH total $1,000,000

$DL cost per hour $20

****PLEASE ROUND UGLY LONG PERCENTAGES/#'s TO WHOLE % or #*****

Q1) Using simple costing what are the cost to produce for each? 8 marks

Q2) Using ABC, what are the costs to produce for each? 10 marks

Q3) Which product do we choose to sell more of using each method and why? 8 marks

Q4) Is EB benefiting from the ABC method? Explain. 4 marksduct do we choose to sell more of using each method and why? 8 marks

Q4) Is EB benefiting from the ABC method? Explain. 4 marks