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

points

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 Commerclal grinders. ACE only recently began producing the Commerclal model. Since

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, which

Is representative, manufacturing overhead totaled $$2,050,500$ based on production of $30,000$ Personal grinders and $10,000$

Commerclal grinders. Direct costs were as follows:

Management has determined that overhead costs are caused by three cost drivers. These drlvers and thelr costs for last year are as

follows:

Requlred:

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?

Answer is complete but not entirely correct.

Complete this question by entering your answers in the tabs below.

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?

Note: Round "Total Cost per Unit" to $2$ decimal places.

$***$ Cant figure it out, why this number is wrong?$**$ Explanation please...