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Flyer Corporation manufactures two products, Product A and Product B. Product B is of fairly recent origin, having been developed as an attempt to enter a market closely related to that of Product A. Product B is the more complex of the two products, requiring three hours of direct labor time per unit to manufacture compared to one and one-half hours of direct labor time for Product A. Product B is produced on an automated production line. Overhead is currently assigned to the products on the basis of direct-labor-hours. The company estimated it would incur $396,000 in manufacturing overhead costs and produce 5,500 units of Product B and 22,000 units of Product A during the current year. Unit costs for materials and direct labor are:

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jepessoa

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since the numbers are missing, i looked for similar questions:

                              Product A Product B

Direct material       $9           $20

Direct labor               $7                $15

the predetermined overhead rate = $396,000 / [(5,500 x 1.5) + (22,000 x 3)] = $396,000 / 74,250 direct labor hours = $5.333333 per direct labor hour

total production costs per unit:

Product A = $9 + $7 + ($5.33333 x 1.5) = $24

Product B = $20 + $15 + ($5.33333 x 3) = $51

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