Identify the cost allocation system that would benefit this company most. Justify your response. b) Does this cost allocation system meet management planning and control goals? Explain. c) What are the ethical implications that should be considered with this cost allocation system? d) Describe the ethical implications of direct costs versus indirect costs. What considerations should be made when selecting one of these two?

Budgeted Unit Actual Volume Flexible Budget

Amounts Amount

Revenues $              21.00 47,000 $987,000

Variable Costs

DM-Plastic                     4.50 47000 211,500

DM-Cedar                     0.75 47000 35250

Direct Manuf. Labor                     6.00 47000 282000

Variable Manuf. Overhead                     0.06 47000 2820

Total Variable Manufacturing Costs                   11.31 89676 531570

Fixed Manufacturing Overhead 95000

Total Manufacturing Costs 626570

Gross Margin $360,430