Northwest Industrial Products Corporation two products 1 and product L Product is expected to sell 50,000 units and product L 100,000 units next year . A unit of either product requires 0.2 direct labor .The company's total manufacturing overhead for the year is expected to be $2925000

Required : The company currently applies manufacturing overhead to products using direct labour hours the allocation If this method is followed how overhead cost will applied to each product? Compute both the overhead cost per unit and the total amount of overhead cost that will be applied to product(In other words, how much overhead cost will be applied to of perduct ? Product L? How much overhead cost will be applied in total to all the units of product H? Product L?)

2. Management is considering activity based costing system and would like to know what impact this change might have on Page product costs. For the purpose of discussion , it has been suggested that all of the manufacturing overhead be treated as a product-level cost. The total manufacturing overhead would be divided in half between the two products , with $1,462,500 assigned to product H and \$1,462,500 assigned to product L.

If this suggestion is followed, how much overhead cost per unit will be applied to each product?

3. Explain the impact on unit product costs of the switch in costing systems