Ex 9-43 A 1 Maglie Company manufactures two video game consoles: handheld and home. The handheld consoles are smaller and less expensive than the home consoles. The company only recently began producing the home model. Since the introduction of the new product, profits have been steadily declining. Management believes that the accounting system is not accurately allocating costs to products, particularly because sales of the new product have been increasing. 10 points Management has asked you to investigate the cost allocation problem. You find that manufacturing overhead is currently assigned to products based on their direct labor costs. For your investigation, you have data from last year. Manufacturing overhead was $1,259,000 based on production of 340,000 handheld consoles and 106,000 home consoles. Direct labor and direct materials costs were as follows. eBook Home Print Handheld Total Direct $1,159,750 $414,000 $1,573,750 labor Materials 770,000 698,000 1,468,000 Reference Reference Management has determined that overhead costs are caused by three cost drivers. These drivers and their costs for last year are as follows. Activity Level Costs Assigned $ 605,000 Handheld Home Total 45 10 55 Cost Driver Number of production runs Quality tests performed Shipping orders processed Total overhead 459,000 10 17 27 110 40 150 195,000 $1,259,000 Required: a. How much overhead will be assigned to each product if these three cost drivers are used to allocate overhead? What is the total cost per unit produced for each product? b. How much overhead will be assigned to each product if direct labor cost is used to allocate overhead? What is the total cost per unit produced for each product? Complete this question by entering your answers in the tabs below. Required Required A B How much overhead will be assigned to each product if these three cost drivers are used to allocate overhead? What is the total cost per unit produced for each product? (Round "Total Cost per Unit" to 2 decimal places.) Show less Total Cost Overhead per Unit Handheld Home (Required A Required B Ex 9-43 1 1 10 points Maglie Company manufactures two video game consoles: handheld and home. The handheld consoles are smaller and less expensive than the home consoles. The company only recently began producing the home model. Since the introduction of the new product, profits have been steadily declining. Management believes that the accounting system is not accurately allocating costs to products, particularly because sales of the new product have been increasing. Management has asked you to investigate the cost allocation problem. You find that manufacturing overhead is currently assigned to products based on their direct labor costs. For your investigation, you have data from last year. Manufacturing overhead was $1,259,000 based on production of 340,000 handheld consoles and 106,000 home consoles. Direct labor and direct materials costs were as follows. eBook Print Handheld Home Total Direct labor $1,159,750 $414,000 $1,573,750 Materials 770,000 698,000 1,468,000 Reference Management has determined that overhead costs are caused by three cost drivers. These drivers and their costs for last year are as follows. Activity Level Costs Assigned $ 605,000 Handheld Home 45 10 Total 55 Cost Driver Number of production runs Quality tests performed Shipping orders processed Total overhead 459,000 10 17 27 195,000 110 40 150 $1,259,000 Required: a. How much overhead will be assigned to each product if these three cost drivers are used to allocate overhead? What is the total cost per unit produced for each product? b. How much overhead will be assigned to each product if direct labor cost is used to allocate overhead? What is the total cost per unit produced for each product? Complete this question by entering your answers in the tabs below. Required Required A B How much overhead will be assigned to each product if direct labor cost is used to allocate overhead? What is the total cost per unit produced for each product? (Do not round intermediate calculations. Round "Total cost per unit" to 2 decimal places.) Show less Total Cost Overhead per Unit Handheld Home