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For many years, Thomson Company manufactured a single product called LEC $40.$ Then three years ago, the company

automated a portion of its plant and at the same time introduced a second product called LEC $90$ that has become

increasingly popular. The LEC $90$ is a more complex product, requiring $0\mathrm{.}80$ hours of direct labor time per unit to

manufacture and extensive machining in the automated portion of the plant. The LEC $40$ requires only $0\mathrm{.}40$ hours of direct

labor time per unit and only a small amount of machining. Manufacturing overhead costs are currently assigned to

products on the basis of direct labor$-$hours.

Despite the growing popularity of the company's new LEC $90,$ profits have been declining steadily. Management is

beginning to believe that there may be a problem with the company's costing system. Direct material and direct labor

costs per unit are as follows:

Direct materials

Direct labor $(0\mathrm{.}40$ hours and $0\mathrm{.}80$ hours @ $$10\mathrm{.}00$ per hour$)$

Management estimates that the company will incur $$728,000$ in manufacturing overhead costs during the current year

and $60,000$ units of the LEC $40$ and $20,000$ units of the LEC $90$ will be produced and sold.

Required:

$1-$a$.$ Compute the predetermined overhead rate assuming that the company continues to apply manufacturing overhead cost on the

basis of direct labor$-$hours.

$1-$b$.$ Using this rate and other data from the problem, determine the unit product cost of each product.

Management estimates that the company will incur $$728,000$ in manufacturing overhead costs during the current year

and $60,000$ units of the LEC $40$ and $20,000$ units of the LEC $90$ will be produced and sold.

Required:

$1-$a$.$ Compute the predetermined overhead rate assuming that the company continues to apply manufacturing overhead cost on the

basis of direct labor$-$hours.

$1-$b$.$ Using this rate and other data from the problem, determine the unit product cost of each product.

Complete this question by entering your answers in the tabs below.

Ret $1A$

Req $1B$

Compute the predetermined overhead rate assuming that the company continues to apply manufacturing overhead cost on

the basis of direct labor$-$hours. $($Round your answer to $2$ decimal places.$)$

Management estimates that the company will incur $$728,000$ in manufacturing overhead costs during the current year

and $60,000$ units of the LEC $40$ and $20,000$ units of the LEC $90$ will be produced and sold.

Required:

$1-$a$.$ Compute the predetermined overhead rate assuming that the company continues to apply manufacturing overhead cost on the

basis of direct labor$-$hours.

$1-$b$.$ Using this rate and other data from the problem, determine the unit product cost of each product.

Complete this questlon by entering your answers in the tabs below.

Req $1$ A

Req $1$B

Using this rate and other data from the problem, determine the unit product cost of each product. $($Do not round intermediate

calculations. Round your final answers to $2$ decimal places.$)$