Please do not provide solution that contains image thnx Asbury Coffee Enterprises (ACE) manufactures two models of coffee grinders: Personal and Commercial. The Personal grinders have asmaller capacity and are less durable than the Commercial grinders. ACE only recently began producing the Commercial model. Sincethe Introduction of the new product, profits have been steadily declining, although sales have been increasing. The management atACE belleves that the problem might be in how the accounting system allocates costs to products.The current system at ACE allocates manufacturing overhead to products based on direct labor costs. For the most recent year, whichis representative, manufacturing overhead totaled $1,942,500 based on production of 30,000 Personal grinders and 10,000Commercial grinders. Direct costs were as follows:Direct materialsDirect laborCost DriverNumber of production runsQuality tests performedShipping orders processedTotal overheadPersonal$ 1,439,4001,023,000Management has determined that overhead costs are caused by three cost drivers. These drivers and their costs for last year are asfollows:Commercial$ 548,250595,750Costs Assigned$ 922,500792,000228,000$ 1,942,500RequiredTotal$ 1,987,6501,618,750Activity LevelPersonal5015150Commercial252550Complete this question by entering your answers in the tabs below.Total7540200Required:a. How much overhead will be assigned to each product if these three cost drivers are used to allocate overhead? What is the totalcost 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 perunit produced for each product?.Required AHow much overhead will be assigned to each product if these three cost drivers are used to allocate overhead? What is thetotal cost per unit produced for each product?Note: Round "Total Cost per Unit" to 2 decimal places.

Direct material cost is the cost of raw material produced or purchased to produce the final…

Asbury Coffee Enterprises (ACE) manufactures two models of coffee grinders: Personal and Commercial. The Personal grinders have a smaller capacity and are less durable than the Commercial grinders. ACE only recently began producing the Commercial model. Since the Introduction of the new product, profits have been steadily declining, although sales have been increasing. The management at ACE belleves that the problem might be in how the accounting system allocates costs to products. The current system at ACE allocates manufacturing overhead to products based on direct labor costs. For the most recent year, which is representative, manufacturing overhead totaled $1,942,500 based on production of 30,000 Personal grinders and 10,000 Commercial grinders. Direct costs were as follows: Direct materials Direct labor Personal $ 1,439,400 1,023,000 Cost Driver Number of production runs Quality tests performed Shipping orders processed Total overhead Commercial $ 548,250 595,750 Management has determined that overhead costs are caused by three cost drivers. These drivers and their costs for last year are as follows: Costs Assigned $ 922,500 792,000 228,000 $ 1,942,500 Total $ 1,987,650 1,618,750 Activity Level Personal se 15 150 Commercial 25 25 50 Total 75 40 200 Complete this question by entering your answers in the tabs below. . 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? 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? Note: Round "Total Cost per Unit" to 2 decimal places.

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q