The Branca Group produces two processors: the magnificent processor and the elite processor. Brancas products are very in demand and so the company is working at capacity. You are on Brancas managerial accounting team and have been given the following information:

Magnificent Elite Annual Production in units 52,000 97,000 Direct material costs $187,000 $367,000 Direct manufacturing labour costs $97,000 $187,000 Direct manufacturing labour-hours 4,675 9,175 Machine-hours 32,333 62,333 Number of productions runs 52 52 Inspection hours 1,387 647

Total manufacturing overhead: Machining $388,000 Setup costs $124,800 Inspection costs $135,232

1. Select a cost driver for each overhead cost pool and calculate the manufacturing overhead cost per unit for each product. Explain why you chose that cost driver. 2. Compute the manufacturing cost per unit for each product. 3. What can you conclude from the results of your analysis?