Help 2 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 belleves 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 $1.270.000 based on production of 330,000 handheld consoles and 104,000 home consoles Direct labor and direct materials costs were as follows Book Direct labor Material Randheld $1,195,500 790,000 Home $392,000 665,000 Print Total $1,587,500 1,455,000 Management has determined that overhead costs are caused by three cost drivers. These drivers and their costs for last year are as rences follows. Cont Driver Number of production runs Quality tests performed Shipping orders processed Total overhead Conta Assigned $540,000 570,000 160,000 51,270,000 Activity level Handheld Home 35 - 10 11 19 110 50 Total 45 30 160 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. 2 Management has determined that overhead costs are caused by three cost drivers. These drivers and their costs for last year areas follows. 10 Cont Det Number of production mane Quality testa performed Shipping orders processed Total overhead Beste $ 540,000 $70,000 160,000 $1,270,000 35 11 110 45 30 160 SO Book 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 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? ances Complete this question by entering your answers in the tabs below. Required A Required 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.) Total Cost per Overhead Unit Handheld Home Required B > 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 produced for each product? Brint ences Complete this question by entering your answers in the tabs below. Required A Required B How much overhead will be assigned to eath product of 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.) Overhead Total Cost per Unit Handheld Home MacBook Air
