Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please answer quick!! Maglie Company manufactures two video game consoles: handheld and home. The handheld consoles are smaller and less expensive than the home consoles.

image text in transcribed
image text in transcribed
please answer quick!!
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 $1,348,000 based on production of 300,000 handheld consoles and 116,000 home consoles. Direct labor and direct materials costs were as follows: Direct labor Materials tandheld $1,298,000 730,000 Home $387.000 650,000 Total $1,605,000 1.380,000 Management has determined that overhead costs are caused by three cost drivers. These drivers and their costs for last year are as follows: Cont Driver Number of production ruse quality tests performed Shipping orders processed Total overhead Coute assigned 5 650,000 522,000 176.000 $1,348,000 Activity level Randheld Nome 40 10 11 18 110 50 Total 50 29 160 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? (Round "Total cost per unit" to 2 decimal places.) Overhead Total Cost per Unit Handheld Home

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting, 1, (6 Months)

Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac

14th Edition

1337270814, 9781337270816

More Books

Students also viewed these Accounting questions