Hi,

I am having difficulty with the below question:

A. manufacture two types of wood bookends: plain and hand-carved. the following information about the production processes available:

plain hand carved

number produced 120,000 75,000

machine hours 95,000 35,000

revenues 4,800,000 4,400,000

direct cost 3,800,000 3,100,000

total factory overhead is 1,200,000. of this overhead 500,000 is related to utilities and the remaining is

related to quality control.

a. determine the total overhead cost assigned to each type of bookend using machine hours as the allocation base. calculate the gross profit per unit for each product

b. determine the total overhead cost assigned to each type of bookend if overhead is assigned using allocation base appropriate to the overhead cost. calculate the gross profit per unit of each product

c. explain why the unit cost of each model is different between the two methods of allocation.