. Based on the calculations in Tab 3 using ABC, comment on the profits made for each product type. Explain in your report why this has changed under ABC costing. Also indicate which one of the two systems; that is, historical cost or ABC, provides the best answers for decision making to improve cost management to improve EBITDA.

A B C E F G H J Question 1 LGI's production managers recently attended a course at UMGC where they learned about ABC costing. They propose allocating the total fixed costs between Standard and Deluxe boxes based on this method . They collected information about the cost drivers and the break up of the total costs in Table 1below. How much overhead would be allocated to Standard and Table 1 Manufacturing $ Amount Cost driver Standard Box Deluxe Box Totals of Drivers Cost of Standard Cost of Deluxe Total Cost Check [must agree to overhead Boxes Boxes Column B7:814) Depreciation $47.00 Square feet 7.000 80.000 87.000 3.78 43.22 $47.00 $50.00 Direct Labour Maintenance 1,000 9,000 10,000 5.00 $ Hours 45.00 $50.00 Purchase order $9 Number of 500 4,500 5.000 $ 0.90 8.10 $9.00 processing purchases orders Number of Inspection $34 1,000 5000 7,000 $ 4.86 $ 29. 14 $34.00 employees Indirect Materials $5.00 Labour Hours 1.000.00 9.000.00 10.000 $ 0.50 $ 1.50 $5.00 Supervision $7.00 #of inspections 200 800 1.000 1.40 $ 5.60 $7.00 Jnit Supplies $4.00 1,000.00 9,000.00 10,000 $ 0.40 $4.00 manufactured 3.60 $156.00 16.84 39. 16 $ 156.00 Number of bokes 108 18 per year Allocated Cost per BOX $1.24 Question 1 Standard Boxes Deluxe Boxes Total Sales $ 2,030.40 $ 513.00 $ 2.543.40 Less: Variable Costs 1,080.00 180.00 $ 1,260.00 Contribution 950.40 333.00 $ 1.283.40 Less: Fixed Costs 16.84' $ 139. 16 156.00 Profit 933.56 193.84 1,127.40 Profit % 45.98% 37.79% 44.33% Sheet1 Sheet2 Sheet3 Sheet4 +