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Faercise (3) Dubai Industrial Company manufactures two products: Crystal and Glass Management believes that the accounting system is not accurntely allocating costs to products, and
Faercise (3) Dubai Industrial Company manufactures two products: Crystal and Glass Management believes that the accounting system is not accurntely allocating costs to products, and has asked you to investigate the cost allocation problem. You find that manufacturing overhead is currently assigned to products based on their machine hours. You have the following data Crystal Glass Total Direct Material AED 534,000 678,000 1,212,000 Direct Labor 440,000 528.000 968,000 862,000 Manufacturing Overhead No. of units produced 22.042 units 28,000 units 50,042 units Management has determined that overhead costs are caused by three cost drivers as follows: Cost Driver Activity Costs Assigned Crystal Glass Total Measure Machine Processing Number of AED 240,000 1.200 1,800 3,000 machine hours Production Orders Number of AED 316,200 140 200 340 orders Shipments Number of AED 305,800 80 120 200 shipments Total M.OH AED 862,000 Required. (Show all caclulations) If the company uses the ABC costing system and the three cost drivers are used to allocate overhead allocate the manufacturing overhead costs: A- How much overhead will be assigned to each product? B- What is the total cost per unit produced for each product
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