The relationship between direct material costs and direct labor costs is not relevant in determining whether units of production is an appropriate overhead allocation base.
Whether direct labor cost is high or low is not relevant in determining whether units of production is an appropriate overhead allocation base.
The only time when units of production is an appropriate allocation base is when the company produces only one product. Since each unit produced of that one product will require the same amount of inputs, allocating overhead according to units of production will produce an equitable allocation.
Units of production is not an appropriate overhead allocation base when several well-differentiated products are manufactured. Each individual product will require a different amount of inputs, and allocating overhead evenly to all units produced would produce an inequitable allocation.
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