Calculating activity-based product costs; activity-based management (CMA adapted)

(LO 2, 3, 5) Highland Manufacturing produces two products in its Saratoga plant, balzene and galvene. Since it opened its doors in 1965, Highland has been using a single manufacturing overhead pool to accumulate overhead costs. Overhead has been allocated to products based on direct labor hours.

Until recently, Highland was the sole producer of galvene in the country and was therefore able to dictate the selling price. However, last year Marcella Products began marketing a comparable product at $37 per unit