Answer:
Overhead rate per hour = $5 per hour
Explanation:
Provided labor hour rate = $28 per hour
Also cost of direct labor for both the products
CC1 = $22.40
CC2 = $15.40
Total labor hour for each product = Cost per unit/Rate per hour
CC1 = $22.40/$28 = 0.8 X 60 minutes = 48 minutes
CC2 = $15.40/$28 = 0.55 X 60 minutes = 33 minutes
Provide total units
CC1 = 22,000 units, therefore total time = 22,000 X 48 minutes = 1,056,000 minutes = 17,600 hours (1,056,000/60)
CC2 = 91,000 units, therefore total time = 91,000 X 33 minutes = 3,003,000 minutes = 50,050 hours
Total hours = 17,600 + 50,050 hours = 67,650 hours
Therefore Overhead rate per hour = $338,250/67,650 = $5 per hour
On this rate per hour for labor the the overheads will be charged.
Overhead rate per hour = $5 per hour