Marx Manufacturing allocates factory overhead using one cost pool with direct labor hours as

Exercise 6­12Marx Manufacturing allocates factory overhead using one cost pool with direct labor hours asthe allocation base. Marx has two production departments, P1 and P2. The new accountant atMarx estimates that next year, the total factory overhead costs will be $5,270,000, andapproximately 527,000 direct labor hours will be worked. The accountant also estimates thatP1 will use 216,800 direct labor hours, and there will be about $3,035,200 in overhead costs inP1. P2 will use 310,200 direct labor hours, and there will be $2,234,800 in overhead costs inP2. Marx has two products, A1 and B1. It takes 2 direct labor hours in P1 and 2 direct laborhours in P2 to complete one unit of A1. It takes 1 direct labor hour in P1 and 3 direct laborhours in P2 to complete one unit of B1.Allocate overhead to each product using the following: (Round answers to 2 decimalplaces, e.g. 15.25.)One-cost-pool systemA1B1Separate overhead costpool for eachdepartment$$per unit$per unit$per unitper unitWhich product will be undercosted and which will be overcosted with the one-cost-poolsystem?Using one-cost-pool system product______ will be undercosted and product______ will be overcosted.

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