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 $1,172,000 based on production of 320.000 handheld consoles and 105.000 home consoles. Direct labor and direct materials costs were as follows. Direct labor Materials Handheld $1,062,800 720, eee Home $403, 88 656,809 Total $1,465, 80e 1,376,000 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 Handheld Home Total Cost Driver Number of production runs Quality tests performed Shipping orders processed Total overhead Costs Assigned $ 455,000 496, eee 221,800 $1,172,800 12 110 31 170 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 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.) Overhead Total Cost per Unit Handheld Home 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 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 Elite Lawn & Plowing (EL&P) is a lawn and snow plowing service with both residential and commercial clients. The owner believes that the commercial sector has more growth opportunities and is considering dropping the residential service. Twenty employees worked a total of 40.000 hours last year. 26.000 on residential jobs and 14,000 on commercial jobs. Wages were $15 per hour for all work done. Any materials used are included in overhead as supplies. All overhead is allocated on the basis of labor-hours worked, which is also the basis for customer charges. Because of increased competition for commercial accounts, EL&P can charge $36 per hour for residential work, but only $28 per hour for commercial work. Required: a. If overhead for the year was $104,230. what were the profits of the residential and commercial services using labor-hours as the allocation base? (Do not round Intermediate calculations. Round final answers to the nearest whole dollar.) b. Overhead consists of costs of traveling to the site, using equipment (including vehicle rental), and using supplies, which can be traced as follows. Activity Traveling Using equipment Using supplies Total overhead 45 Cost Driver Number of clients served Equipment hours Area serviced in square yards Cost Driver Volume Commercial Residential 16 3,500 2,800 180,000 50,000 Cost $ 17,880 34,650 52,500 $184,230 Recalculate profits for commercial and residential services based on these activity bases. (Do not round Intermediate calculations. Round final answers to the nearest whole dollar.) Revenue Commercial PS 392.000 210,000 38,481 Residential S 938.000 390.000 67.750 Direct Labor Overhead Profit Total Overhead Profit