Koontz Company manufactures two models of industrial components a Basic model and an Advanced Model The company considers all of its manufacturing overhead costs to be fixed and it uses plantwide manufact id it uses plantwide manufacturing overhead cost allocation based on direct labor-hours. Koontz's controller prepared the segmented income statement that is shown below for the most recent year (he allocated selling and administrative expenses to products based on sales dollars): Number of units produced and sold Basic 20,000 Advanced 10, eee Total 30,000 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income (loss) $3,800, eee 2,300,000 700,000 720,000 $ (20,000) $2,eee,200 $5, eee, eee 1,350, eee3 ,650, eee 650,000 1,350, eee 480, eee 1, 2ee, eee $ 170,000 $ 150, eee Direct laborers are paid $20 per hour. Direct materials cost $40 per unit for the Basic model and $60 per unit for the Advanced model. Koontz is considering a change from plantwide overhead allocation to a departmental approach. The overhead costs in the company's Molding Department would be allocated based on machine hours and the overhead costs in its Assembly and Pack Department would be allocated based on direct labor-hours. To enable further analysis, the controller gathered the following information: Molding $787,500 Assemble and Pack $ 562,500 Total $1,350,000 Manufacturing overhead costs Direct labor hours: Basic Advanced Machine hours: Basic 10, eee 5,000 2e, eee 1e, eee 30,000 15,000 12,800 12,000 Next Koontz Company manufactures two models of industrial components a Basic model and an Advanced Model The company considers all of its manufacturing overhead costs to be fixed and it uses plantwide manufact id it uses plantwide manufacturing overhead cost allocation based on direct labor-hours. Koontz's controller prepared the segmented income statement that is shown below for the most recent year (he allocated selling and administrative expenses to products based on sales dollars): Number of units produced and sold Basic 20,000 Advanced 10, eee Total 30,000 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income (loss) $3,800, eee 2,300,000 700,000 720,000 $ (20,000) $2,eee,200 $5, eee, eee 1,350, eee3 ,650, eee 650,000 1,350, eee 480, eee 1, 2ee, eee $ 170,000 $ 150, eee Direct laborers are paid $20 per hour. Direct materials cost $40 per unit for the Basic model and $60 per unit for the Advanced model. Koontz is considering a change from plantwide overhead allocation to a departmental approach. The overhead costs in the company's Molding Department would be allocated based on machine hours and the overhead costs in its Assembly and Pack Department would be allocated based on direct labor-hours. To enable further analysis, the controller gathered the following information: Molding $787,500 Assemble and Pack $ 562,500 Total $1,350,000 Manufacturing overhead costs Direct labor hours: Basic Advanced Machine hours: Basic 10, eee 5,000 2e, eee 1e, eee 30,000 15,000 12,800 12,000 Next