Exercise $9-41($Algo$)$ Activity$-$Based versus Traditional Costing $($LO $9-4,5,6)$

Asbury Coffee Enterpises $($ACE$)$ manufactures two models of colfee grinders: Personal and Commercial. The Personal grinders have

smaller capacity and are less durable than the Commercial grinders. ACE only recently began producing the Commercial model. Sinc

the introduction of the new product, profits have been steadily deciling, 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, whict

Is representative, manufacturing overhead totaled $$1,915,500$ based on production of $30,000$ Personal grinders and $10,000$

Commercial grinders. Direct costs were as follows:

Management has determined that owerhead costs are caused by three cost divers. These drivers and their costs for last year are as

follows:

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?

unit proctuced for each product?