I am totally lost in what information I shouyld put where. I am missing a key part of understanding this process and I do not know what it is. This is what I have done on this problem:

Product Line Batch level

Manufacturing OH Costs 600,000 400,000
Total Units of Activity (800,000) DM & DL (900,000)
Manufacturing OH Application Rate 600,000/800,000 400,000/900,000
Manufacturing OH Applied to Units: 15 Units: 10
Standard Products
Manufacturing OH Applied to Units: 60 Units: 30
Custom Products
Total Manufacturing OH Applied

Standard Products Custom Products
Sales 1,200,000 1,800,000
Direct Materials (200,000) (300,000)
Direct Labor (600,000) (600,000)
*Manufacturing OH (500,000) (500,000)
Gross Margin (100,000) 400,000


Total Mfg. OH Cost Stand Pro Custom Prod

Batch-Level Manufacturing OH $ 600,000 15 Batches 60 Batches
Product-Line Manufacturing OH 400,000 10 lines 30 Lines
$1,000,000

I am suppsoe to prepare a Gross Margion calculation for this company"s two divisions assuming that manufacturing overthead is alloctaed based on the number of batches & number of product lines. In also states that *Manufacturing OH is allocated to production based on the amount of direct labor cost.

In my numbers, the total units of activity under the Manufacturing OH Costs I used the direct materials and direct labor - where did I go wrong?

Can someone please explain how I would go about getting the correct information where it belongs. I believe I am way off - I am totally lost!

Thanks