To complete the case$-$study you will use the information we covered in chapter $17$ Activity$-$Based Costing $($ABC$).$ The case$-$study requires that you follow the correct steps to allocate overhead costs to Zauner Ornament's three products: small glass ornaments, large glass ornaments and specialty glass ornaments. Please prepare a report designed to inform Zauner Ornament's management team about your findings when comparing the products costed using ABC compared to the traditional methods considered by the business. In doing so please include the following:

$1)$ Calculate the ABC costs for each product on a per$-$box basis. Use the ending inventory costs as the cost driver to allocate the plant$-$administrative overhead cost. All other overhead cost drivers are explained in the case$-$study. Please prepare a table similar to those used in chapter $17,$ showing the details of your overhead cost allocations to each product. As shown in the chapter, the table should include columns for the $1)$ activity cost pool, $2)$ cost driver, $3)$ estimated overhead $$,4)$ estimated use of cost driver per activity, $5)$ overhead rate by activity, $6)$ estimated use of cost driver by product, and $7)$ total overhead allocated to each product by activity.

In the module below titled Example Allocation Table, you will find an Excel spreadsheet that shows the format to use when preparing the overhead allocation table.

Your report must be uploaded in one of the following formats: xlsx$,$ docx, $.$pdf or $.$jpg$.$

$2)$ What do these results tell you about activity$-$based costing versus costing based on the traditional methods of standard volume or direct materials plus direct labor? Which costing method do you think is best for Zauner? Please explain the reason for your choice.

$3)$ Calculate each product's contribution margin per unit $($box$)($gross profit per unit$)$ using ABC, volume$-$based and DM plus DL based costing. Based on the ABC costing results, what changes, if any, should management make to Zauner's pricing and $/$ or marketing strategy?