a)

Which of the following statements are true concerning the predetermined overhead rate when the direct labor-hour requirement for the Deluxe model dropped from 5 hours to 2 hours? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.)

	The predetermined overhead rate decreased because the total direct labor-hours dropped.
	The predetermined overhead rate increased because the total estimated overhead cost increased.
	The predetermined overhead rate increased because the total direct labor-hours dropped.
	The predetermined overhead rate decreases because the total estimated overhead cost increased.

(b)

Which of the following statements are true concerning the unit product costs for the Tourist model when the direct labor-hour requirement for the Deluxe model drops from 5 hours to 2 hours? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.)

	Economically, the fact that the Deluxe model's direct labor-hour requirement changed should have little or no impact on the cost of the Tourist model.
	The traditional unit product cost of the Tourist model increases when the Deluxe model's direct labor-hour requirement decreases.
	The ABC unit product cost of the Tourist model increases when the Deluxe model's direct labor-hour requirement decreases, but by not by as much as the traditional unit product cost.

Requirement 2:

Change the direct labor-hour requirement for the Deluxe model back to 5 hours in cell B10. Assume that the production orders change so that the Deluxe model Will have 290 orders in cell C19 and the Tourist model will have 210 orders in cell D19. The Data area should now look like this:

(a)	What is the traditional unit product cost for the Deluxe model after this change?

(b)

Which of the following statements are true? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.)

	The traditional unit product costs for the two models have been changed by the change in production orders because traditional overhead allocations based on direct labor-hours ignore other cost drivers such as production orders.
	The traditional unit product costs for the two models are unchanged by the change in production orders because traditional overhead allocations based on direct labor-hours ignore other cost drivers such as production orders.
	The traditional unit product costs for the two models are unchanged by the change in production orders because neither the total estimated overhead cost nor the total direct labor-hours were affected.

(c)	What is the ABC unit product cost for the Deluxe model after this change? (Round your intermediate calculations and final answer to 2 decimal places.)

(d)

Which of the following statements are true concerning the effects of the change in production orders on the ABC unit product costs? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.)

	The ABC unit product cost of the Deluxe model has increased and the ABC unit product cost of the Tourist model has decreased because a lower proportion of the production orders are now attributable to the Deluxe model.
	The ABC unit product cost of the Deluxe model has increased and the ABC unit product cost of the Tourist model has decreased because a higher proportion of the production orders are now attributable to the Deluxe model.
	The ABC unit product cost of the Deluxe model has decreased and the ABC unit product cost of the Tourist model has increased because a lower proportion of the production orders are now attributable to the Deluxe model.
	The ABC unit product cost of the Deluxe model has decreased and the ABC unit product cost of the Tourist model has increased because a higher proportion of the production orders are now attributable to the Deluxe model.

Requirement 3:

Change the data in your worksheet so that it matches the following:

(a)	What is the traditional unit product cost for the Deluxe model now? (Round your intermediate calculations and final answer to 2 decimal places.)

(b)	What is the traditional unit product cost for the Tourist model? (Round your intermediate calculations and final answer to 2 decimal places.)

(c)	What is the ABC unit product cost for the Deluxe model? (Round your intermediate calculations and final answer to 2 decimal places.)

(d)	What is the ABC unit product cost for the Tourist model? (Round your intermediate calculations and final answer to 2 decimal places.)