(1)ABS Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours. The company has three productsBlitz, Posts, and Zones.

The company's estimated total manufacturing overhead for the year is $2,340,000and the company's estimated total direct labor-hours for the year is 65,000.

The company is considering using activity-based costing to determine its unit product costs. Data for this proposed activity-based costing system appear below:

Activities (Activity Measures)	Estimated Overhead Cost
Supporting direct labor (direct labor hours)	$ 650,000
Setting up machines (setups)	200,000
Machine operation and maintenance (machine hours)	1,200,000
Parts administration (no. of parts)	290,000
Total	$ 2,340,000

Estimated Activity Measures	Blitz	Posts	Zones	Total
Direct labor hours	40,000	10,000	15,000	65,000
Setups	150	400	450	1,000
Machine hours	15,000	50,000	10,000	75,000
No. of parts	8	30	20	58

Additional Information	Blitz	Posts	Zones
Number of units of product	70,000	20,000	30,000
Direct materials cost per unit	$ 75.00	$ 45.00	$ 35.00
Direct labor cost per unit	$ 20.00	$ 15.00	$ 12.00

Required:

1. Determine the cost per unit of each of the company's products under the traditional costing system (using direct labor-hours).

2. Determine the cost per unit of each of the company's products under activity-based costing system.

3. Discuss the managerial implications of using a traditional direct-labor hours approach in circumstances like this problem. Focus on the changes in the total overhead allocation and the manufacturing overhead per unit of each product.