Determining Overhead Rate; Normal Capacity Method. Desmond Corp. estimates that its production for the

coming year will be 10,000 widgets, which is 80% of normal capacity, with the following unit costs:

materials, $40; direct labor, $60. Direct labor is paid at the rate of $24 per hour. The widget shaper, the

most expensive piece of machinery, must be run for 20 minutes to produce one widget. Total estimated

overhead is expected to consist of $400,000 for variable overhead and $400,000 for fixed overhead.

Required: Compute the overhead rate for each of the following bases, using the normal capacity activity

level:

(1) physical output

(2) materials cost

(3) direct labor cost

(4) direct labor hours

(5) machine hours