Allisons Acoustics sells two types of microphones, the Rumor and the Number Three. In 2021, Allison manufactures one batch of 800 Rumor microphones and one batch of 200 No. 3 microphones. Overhead costs are $1,000 to set up the factory before each batch. 800 hours of direct labor were required to manufacture the Rumor microphones, and 200 hours of direct labor were required to manufacture the No. 3.

If total direct labor hours are used to allocate setup costs, what is the overhead rate for each product?

If setup costs are allocated by batch, what is the overhead rate for each product?