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Pacifica Industrial Products Corporation makes two products, Product H and Product L . Product H is expected to sell 3 9 , 0 0 0
Pacifica Industrial Products Corporation makes two products, Product H and Product L Product H is expected to sell units next
year and Product is expected to sell units. A unit of either product requires direct laborhours.
The company's total manufacturing overhead for the year is expected to be $
Required:
a The company currently applies manufacturing overhead to products using direct laborhours as the allocation base. If this method
is followed, how much overhead cost per unit would be applied to each product?
b Compute the total amount of overhead cost that would be applied to each product.
Management is considering an activitybased costing system and would like to know what impact this change might have on
product costs. For purposes of discussion, it has been suggested that all of the manufacturing overhead be treated as a productlevel
cost The total manufacturing overhead would be divided in half between the two products, with $ assigned to Product and
$ assigned to Product L
If this suggestion is followed, how much overhead cost per unit would be assigned to each product?
Complete this question by entering your answers in the tabs below.
The company currently applies manufacturing overhead to products using direct laborhours as the allocation base. If this
method is followed, how much overhead cost per unit would be applied to each product? Round your answers to decimal
places.
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