Ed Co manufacture two exercise machines, the 'Power' and the 'Fit' using the same equipment. Ed Co currently uses a blanket overhead rate to assign overheads to products The finance director would like to introduce an activity-based costing approach to costing product. You have been requested to prepare a report that compares total manufacturing costs using the two different methods. Budgeted data for August Overhead costs for the month totalled 820,000 Power Fit Budgeted number of units 3000 Sodo manufactured Direct material cost per unit 40 248 Direct labour hours per unit 1 2 2 Direct labour cost per hour E14 E14 Total machine hours per 4500 5400 product Number of production runs 9 12 per product Number of purchase orders 64 per product Activity cost pools Machine activity Production planning Materials handling 2510,000 130.000 E180.000 Required: a) Calculate the blanket overhead absorption rate per direct labour hour