How much overhead will be assigned to each product if

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.)
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? (Round
"Total Cost per Unit" to 2 decimal places.)

6/6/2016 Assignment Print View
3/5
$ $
$ $
Overhead
Total Cost
per Unit
Handheld
1,044,360 105.53
Home
395,640 151.92
References
Worksheet Learning
Objective: 09­05
Compute product
costs using
activity­based
costing.
Learning
Objective: 09­
04 Explain
how activity­
based
costing and a
two­stage
product
system are
related.
Learning
Objective: 09­06
Compare activity­
based product
costing to
traditional
department
product costing
methods.
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
$1,440,000 based on production of 28,000 handheld consoles and 10,000 home consoles.