chrome://external-file Assignment questions Sony Manufacturing manufactures three models of Lawnmowers, Simple, Standard and Super. The following details are provided for the year ended 31 December 2021. Annual sales (units) Simple 20,000 Standard 1,000 Super 10,000 Product costs: Raw material $10 Direct Labour Manufacturing overhead 85 Total product cost $105 $25 $42 10(0.5 hrs@520) 20 (1 hr @520) 20 (1 hr @520) Calculation of predetermined overhead rate: Manufacturing-overhead budget 170 $215 170 $232 Depreciation, machinery $1,480,000 Maintenance, machinery 120,000 Depreciation, taxes, and insurance for factory 300,000 Engineering 350,000 Purchasing, receiving, and shipping 250,000 Inspection and repair of defects 375,000 Material handling 400,000 Miscellaneous manufacturing overhead costs 295,000 Total $3,570,000 Direct-labor budget: Simple model: Standard model: 10,000 hours 1,000 hours Super model: Total 10,000 hours 2 21,000 hours Predetermined overhead rate = Budgeted overhead/Budgeted direct-labor hours = $3,570,000/21,000 hours - $170 per hour For the past 10 years, the Sony's pricing formula has been to set each lawnmower's target price at 110 percent of its full product cost. Recently, however, the simple- model lawnmower has come under increasing price pressure from offshore competitors. The result was that the price on the simple model has been lowered to $110. Sony's President Mr Cameron recently asked the controller Ms Maria, "Why can't we compete with these other companies? They're selling lawnmowers just like our simple model for $106. That's only a dollar more than our production cost. Are we really that inefficient?" Maria responded by saying, "I think this is due to an outmoded product-costing system. As you may remember, I raised a red flag about our system when I came on board last year. But the decision was to keep our current system in place. In my judgement, our product-costing system is distorting our lawnmower costs. She then ran a few numbers to demonstrate the mast the compiled the basic data