Cheero Company produces two types of stereo units: Deluxe and Regular. For the most recent year, Cheero reports the following data:

Budgeted manufacturing overhead $150 000

Budgeted direct labour hours 50 000

Actual direct labour hours 54 000

Actual manufacturing overhead 250 000

Deluxe Regular

Units Produced 5,000 50,000

Prime Costs $50,000 $320,000

Direct Labour hours 6,000 48,000

Required:

a) Calculate a predetermined overhead rate based on direct labour hours.

b) Calculate the unit product cost of each type of stereo unit.