[hansthak]

XYZ Co. Makes two products -- Model F600 and Model F700. Model F700 offers advanced features and is sold for a higher price than Model F600. Management expects to manufacture 10,000 units of Model F600 and 5,000 units of Model F700 next year. The company's total manufacturing overhead for the year is expected to be $1,620,000. A unit of Model F600 requires 0.2 direct labour-hours and a unit of Model F700 requires 0.8 direct labour-hours.
A. The company currently applies manufacturing overhead to products using direct labour hours as the allocation base. What is the predetermined overhead rate
B. How much overhead cost would be applied to each product in total and per unit
C. Management is considering an activity based costing and would like to know what impact this would have on product costs. Preliminary analysis suggest that under activity based costing a total of $670,000 in machine related costs would be assigned to Model F600 and total of $820,000 would be assigned to Model F700. In addition, a total of $40,000 in other manufacturing costs would be applied to Model F600 and a total of $90,000 would be applied to Model F700. If this method is used, how much overhead cost would be applied to each product in total and per unit?
Find total overhead applied for F600 and F700 and overhead per unit for F600 and F700