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Manning Company produces 3 products and uses the job order method to determine unit costs. Manning uses direct labor hours as a base to allocate overhead.  The following beginning of the year estimates are known:

Total manufacturing overhead                $1,100,000
Total units produced (all 3 products)           100,000
Total direct labor hours                               100,000
Total direct labor cost                            $1,120,000
Total direct material cost                        $2,000,000
Total machine hours                                    50,000


The following end of the year results are also known:

                                                Product1           Product2           Product3                     Total
Direct labor hours                          50,000              30,000              35,000               115,000
Direct labor costs                      $600,000           $200,000           $400,000           $1,200,000
Direct materials costs                $700,000           $800,000           $600,000           $2,100,000
Manufacturing overhead                                                                                                $1,050,000
Total units produced                      41,000              29,000              35,000               105,000
Machine hours                               13,000              22,000              13,000                 48,000

1.         Calculate the cost per unit of each product.







2.         At this stage, is manufacturing overhead under or over applied (and by how much)?





3.         If all three products sell at a market determined price of $55, what strategy would            you recommend?






4.         Repeat questions 1-3 assuming the company uses machine hours to allocate overhead.              Repeat again using total units as the base.  Repeat one more time using direct labor cost     as the base.