Costume Kings has two product lines; Machine made costumes and hand made costumes. The company assigns $80,000 in manufacturing overhead costs to two cost pools; Power cost and Inspection cost. Of this amount, the power cost pool has been assigned $32,000 and the inspection cost pool has been assigned $48,000. Additional information about each product line is shown below:

	Machine Made	Hand Made
Sales Revenue	$240,000	$160,000
Direct labor and material cost	$120,000	$96,000
Units produced and sold	48,000	16,000
Machine hours	96,000	4,000
Quality control inspection hours	1,200	800

Required:-

1. Allocate manufacturing overhead from the activity cost pools to each product line. Use what you believe is the most significant cost drivers from information provided.

2. Compute the cost per unit of Machine made costumes and hand made costumes.

3. On a per-unit basis, which product line appears to be the most profitable? Explain.