A company manufactures and sells two products A and B.

Given the following data on the two products:

Total hours

Product A: 2000 units @ 5 hours 10,000

Product B: 10,000 units @ 4 hours 40,000

50,000

Manufacturing overhead costs total $800,000 each year

1- Assume that the company applies overhead to products on a basis of direct labor hours.

a. Compute the predetermined overhead rate that would be used