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The following are the flexible budget of Coco Corporation in different levels of direct labor hours.
| Direct labor hours |
| 20,000 | 30,000 | 40,000 |
| Variable Factory Overhead | 40,000 | 60,000 | 80,000 |
| Fixed Factory Overhead | 10,000 | 10,000 | 10,000 |
Each product needs 5 direct labor hours and the company expects to produce 2,000 units in 2021.
Required:
a. Calculate the total factory overhead rater per unit using direct labor hours as an allocation base.
b. Calculate the total factory overhead rater per unit using units of production as an allocation base.
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