Final answer:
Product C will absorb the most of the $100 overhead cost because it has the highest number of units produced (70 units). Each unit produced absorbs $1 of the overhead, so product C absorbs $70 in total.
Step-by-step explanation:
Assuming the cost of an overhead item is $100 and there are 10 units of A, 20 units of B, and 70 units of C produced, the product that will absorb the most of the $100 if the allocation is based on units of production is product C.
The total number of units produced is 10 + 20 + 70 = 100 units. To find out how much of the overhead each unit will absorb, we divide the total overhead by the number of units. In this case, each unit will absorb $1 of overhead ($100 / 100 units). Therefore, product A will absorb $10 (10 units x $1), product B will absorb $20 (20 units x $1), and product C will absorb $70 (70 units x $1).
Since product C has the highest number of units, it will absorb the most overhead cost. Other products do not absorb an equal amount as it depends on the number of units produced.