E11.-LO.1 (Predetermined OH rates) Lansing Mfg. prepared the following 2013 abbreviated flexible budget for different levels of machine hours. 20,000 Variable $70,000 24,000 28,000 32,000 $78,000 $86,000 $94,000 manufacturing overhead Fixed 220,000 220,000 220,000 220,000 manufacturing overhead Each product requires four hours of machine time, and the company expects to produce 9,000 units in 2013. Production is expected to be evenly distributed throughout the year. a. Calculate separate predetermined variable and fixed OH rates using as the basis of application (1) units of production and (2) machine hours. Calculation of predetermined variable and fixed overheads on basis of (1) units of production b. Calculate the combined predetermined OH rates using (1) units of product and (2) machine hours. c. Assume that all actual overhead costs are equal to expected overhead costs in 2013 but that Lansing Mfg. produced 10,000 units of product. If the separate rates based on units of product calculated in (a) were used to apply overhead, what amounts of underapplied or overapplied variable and fixed overhead exist at year-end 2013?