a. Compute the total overhead application rates for years 1, 2, and 3.

b. The following information pertains to Phoebes order in year 2, and her current order for year 3, which is identical (in terms of the draperies and window treatments) to her year 2 order.

	year 2	year 3
Direct materials	$15,000	$15,500
Direct labor	$30,000	$32,000

c. Compute the price Vanessa charged Phoebe for her year 2 order and the price quoted for the year 3 order.

d. Do you agree with Phoebe that the price being quoted for her year 3 order is too high?

e. What should Vanessa do? Can you suggest an alternative way for Vanessa to develop her price quotes? Explain.