Midwest Industrial Products Corporation makes two products, Product H and Product L . Product H is expected to sell 50,000 units next year and Product L is expected to sell 10,000 units. A unit of either product requires 0.2 direct labor-hours. The company's total manufacturing overhead for the year is expected to he 1.920,000.
(b) Management is considering an activity-based 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 product-level cost. The total manufacturing overhead would be divided in half between the two products, with 960,000 assigned to Product H and 960,000 assigned to Product L . If this suggestion is followed, how much overhead cost per unit would be applied to each product?