Blendwell Enterprises produces two types of blenders, named Star and Super. The following information regarding these products has been prepared by Blendwell Enteprises.

Total overhead incurred: RM200,000

Blender	Star	Super
Unit produced	100	200
Direct labour used	4,000	4,000
Machine hours used	500	1,500

1. Blendwell Enterprises traditionally allocates overheads using direct labour hours.

Compute the overheads allocated to per unit of the Star and Super blenders, respectively, using direct labour hours to allocate the overhead costs. (2 marks)

2. Blendwell Enterprisess accounting department studies the overhead costs and determines that RM100,000 is to be allocated to labour intensive activities and RM100,000 is to be allocation to machine intensive activities. Compute the overhead units allocated to per unit of Star and Super, respectively, by using direct labour to allocate the overhead costs for labour intensive activities, and using machine hours to allocate the overhead costs for machine intensive activities. (4 marks)

3. Assuming that the overheads per unit computed in b. are more accurate than that computed in a., discuss the implications of assigning overhead costs on the basis of labour hours only (that is, using the approach given a. rather than b.). (4 marks)