Maglie Company manufactures two video game consoles: handheld and home. The handheld consoles are smaller and less expensi 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 $1,254,000 based on production of 330,000 handheld consoles and 105,000 home consoles. Direct labor and direct materials costs were as follows. Handheld Home Total Direct labor $1,166,500 720,000 $401, 000 687,000 $1,567,500 1,407,000 Materials 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 Cost Driver Costs Assigned Home Total Number of production runs Quality tests performed Shipping orders processed $4 540,000 35 10 45 532,000 11 17 28 182,000 90 50 140 Total overhead $1,254,000

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 costs is used to allocate overhead? What is the total cost per unit produced for each product?

Maglie Company manufactures two video game consoles: handheld and home. The handheld consoles are smaller and less expensiv 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 $1,254,000 based on production of 330,000 handheld consoles and 105,000 home consoles Direct labor and direct materials costs were as follows Direct labor Materials Handheld $1,166,500 720,000 Home $401,000 687,000 Total $1,567,500 1,407,000 Management has determined that overhead costs are caused by three cost drivers. These drivers and their costs for last year are as follows Cost Driver Number of production runs Quality tests performed Shipping orders processed Total overhead Costs Assigned $ 540,000 532,000 182,000 $1,254,800 Activity Level Handheld Home 35 10 11 17 90 50 Total 45 28 240 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 Required: a. How much overhead will be assigned to each product if these cost per unit produced for each product? b. How much overhead will be assigned to each product if direct produced for each product? Complete this question by entering your answers in the tal Required A Required B How much overhead will be assigned to each product if these thre total cost per unit produced for each product? (Round "Total Cost Overhead Total Cost per Unit Handheld Home IR Required A Required B How much overhead will be assigned to each product if dire per unit produced for each product? (Do not round interme Overhead Total Cost per Unit Handheld Home