Menswear for Life manufactures two types of suitsHand made and Machine madeand applies manufacturing overhead to all units using direct labor hours. Production information follows.
		Hand Made			Machine Made
Anticipated volume (units)		31,000			58,000
Direct-material cost per unit	$	75		$	45
Direct-labor cost per unit $15 per hour
Hand made = 4 hours per suit; total hours for HM 124,000
Machine made = 2 hours per suite; total hours for MM 116,000
The controller, who is studying the use of activity-based costing, has determined that the firms overhead can be identified with three activities: manufacturing setups, machine processing, and product shipping. Data on the number of setups, machine hours, and outgoing shipments, which are the activities three respective cost drivers, follow.
		Hand Made			Machine Made		total
Setups		176			136		312
Machine hours		62,400			87,750		150,150
Outgoing shipments		150			200		350
Te firms total overhead of $23,423,400 is subdivided as follows: manufacturing setups, $5,110,560; machine processing, $14,054,040; and product shipping, $4,258,800.
Required:
MUST SHOW DETAILED WORK ON HOW YOU GET ANSWER
1. Compute the per unit manufacturing cost of Hand Made and Machine Made by using the companys current overhead costing procedures using Direct labor hours for applied MOH.
2. Compute the per unit manufacturing cost of Hand Made and Machine Made by using activity-based costing.
3.Which method should the company use and why? List at least 3 reasons why.