Given the following information

Part 1

What is the predetermined overhead rate per unit using direct labor hours as an application base? And what is the contribution margin per unit if overhead is applied using expected direct labor hours as a base?

Data:
Sales price per unit…………………$200
Direct materials per unit……………$100
Direct labor per hour………………..$30
Direct labor hour needed per unit….2 hours
Number of units to be produced…..40,000
Total estimated OH………………$200,000

Part 2

Continuing with this same scenario, assume that the following activities incur various OH costs:

Cutting……………….$100,000 based on 80,000 cuts
Assembly…………….$ 75,000 based on 160,000 parts
Inspection…………….$25,000 based on 1,000 inspections

What would the Contribution margin per unit be, given the information above (and below) using ABC?

Sales price per unit…………………$200
Direct materials per unit……………$100
Direct labor per hour………………..$30
Direct labor hour needed per unit….2 hours
Number of units to be produced…..40,000
Total estimated OH………………$200,000

Cutting necessary………………….2 cuts needed per unit

Assembly…………………………..4 assembly parts per unit
Inspection………………………….1 inspection per unit