How does finding the cost to produce, determine whether it is appropriate to allocate indirect cost by each metal's cost? Confused.

ATC 4-4 Writing Assignment Selection of the appropriate cost driver Bullions Enterprises Inc. (BEI) makes gold, silver, and bronze medals used to recognize outstanding athletic performance in regional and national sporting events. The per-unit direct costs of producing the medals follow. Gold Silver Bronze Direct materials $300 $130 $ 35 Labor 120 120 120 During 2015, BEI made 1,200 units of each type of medal for a total of 3,600 (1,200 x 3) medals. All medals are created through the same production process, and they are packaged and shipped in identical containers. Indirect overhead costs amounted to $324,000. BEI currently uses the number of units as the cost driver for the allocation of overhead cost. As a result, BEI allocated $90 ($324,000 = 3,600 units) of overhead cost to each medal produced. Required The president of the company has questioned the wisdom of assigning the same amount of overhead to each type of medal. He believes that overhead should be assigned on the basis of the cost to produce the medals. In other words, more overhead should be charged to expensive gold medals, less to silver, and even less to bronze. Assume that you are BEI's chief financial officer. Write a memo responding to the president's suggestion. Good day, Mr. President! Your request for the new allocation overhead results in the following product cost. The intermediate calculations are rounded- off up to four decimal places. lotal Coot to Produce 6b/.45 331.82 205./3 Screenshot of formula is shown below Explanation: C D Total Gold Silver Bronze 3 Direct Materials 120 4 Labor 120 120 120 3 Direct Cost to Produce ESUMC3+() =SUM[03+04) 1200 1200 1200 17 =(B: "BG] =[CS CG) =[D5*DG) -SUM[B7.C7,C7) 9 Indirect Overhead 324000 9 Indirect Overhead per uni aDVCA 10 Total Cost to Produce SUM(E3 84 641 SUMIC30AMA