Answer:
1a. Product H Overhead cost per unit = [$85 * 0.4] = $34.00
Product L Overhead cost per unit = [$85 * 0.4] = $34.00
Predetermined overhead application rate = Estimated total manufacturing overheads / Total direct Labor hours
Predetermined overhead application rate = $1632000 / {[40000 units * 0.4]+[8000 units * 0.4]}
Predetermined overhead application rate = $1632000 / 19200 direct labor hours
Predetermined overhead application rate = $85 per direct labor hour
1b. Product H Product L
Overhead cost $816,000 $816,000
/No.of units 40000 8000
Overhead cost per unit $20.40 $102.00
Product H Product L Total
Total Overhead cost $1,360,000 $272,000 $1,632,000
Note:
Total Overhead cost = No.of units * Overhead cost per unit
