B. Compute the per-unit overhead cost of product B if the company switches to activity-based costing.

3. Lennox Industries manufactures two products: A and B. A review of the company's accounting records revealed the following per-unit costs and production volumes: Production volumc (units) Dircct matcrial Direct labor 2.500 S 40 5,000 $ 60 2 hours at S12 3 hours at S12 24 36 Manufacturing overhead: 2 hours at S93 3 hours at S93 186 279 Manufacturing overhead is currently computed by spreading overhead of $1,860,000 over 20,000 direct labor hours. Management is considering a shift to activity-based costing in an effort to improve the firm's accounting procedures, and the following data are available: Cost Pool Cost Cost Driver A B Total 120 1,500,000 Direct labor hours 5,000 15,000 2,000 2,2008003.000 100 Sctups General factory Machine processing S 240,000 Number of sctups 20 120.000 Machine hours Lennox determines selling prices by adding 40% to a product's total cost