Overhead absorption rate per direct labour hour Steps:

• Total direct labour hours for P: 5000 units × 1.5 hours/unit = 7500 hours
• Total direct labour hours for Q: 2000 units × 1 hour/unit = 2000 hours
• Total direct labour hours = 7500 + 2000 = 9500 hours
• Overhead absorption rate = fixed overheads ÷ total direct labour hours = $65000 ÷ 9500 ≈$6.88 per hour (direct costs $2570 unused here) Why A is correct:
• Matches formula for overhead absorption rate: total fixed overheads divided by total direct labour hours as absorption base. Why the others are wrong:
• B: Likely divides overheads by Q units only (ignores P labour hours).
• C: Possible error using average units without proper hour weighting.
• D: Close to overheads divided by Q labour hours only ($65000 ÷ 2000 ≈$32.50, misapplied).

Final answer: A