Operating at a normal level of 30,000 direct labour-hours, Lasser Company produces 10,000 units of product each period. The direct labour wage rate is £6 per hour. Two-and-a-half metres of direct materials go into each unit of product; the material costs £8.60 per metre. The flexible budget used to plan and control manufacturing overhead costs is given below (in condensed form):

Required
1. Using 30,000 direct labour-hours as the denominator activity, compute the predetermined overhead rate and break it down into variable and fixed elements.
2. Complete the standard cost card below for one unit of product:

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Overhead costs Variable costs Fixed costs Total overhead cost Cost formula (per direct labour-hour) £1.90 20,000 £38,000 168,000 £206,000 Direct labour hours 30,000 £57,000 168,000 £225,000 40,000 £76,000 168,000 £244,000