eBook Siegel Corporation manufactures a product available in both a deluxe and a regular model. The company has made the regular model for years; the deluxe model was introduced several yea rs ago to capture a new segment of the market. Since the introduction of the deluxe model, the company's profits have steadily declined, and management has become concerned about the accuracy of its costing system. Sales of the deluxe model have been increasing rapidly. Overhead is applied to products on the basis of direct labour-hours. At the beginning ofthe current year, management estimated that $1,701,000 in overhead costs would be incurred and the company would produce and sell 15,000 units of the deluxe model and 42,720 units of the regular model. The deluxe model requires 2.4 hours of direct labour time per unit, and the regular model requires 1.? hours. Materials and labour costs follow: Deluxe Regular Direct materials cost per unit $175 $95 Direct labour cost per hour 21 12 Required: 1. Compute the predetermined overhead rate using direct labour-hours as the basis for allocating overhead costs to products. Compute the unit product cost for one unit of each model. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Predeterm'rned overhead rate Unit product cost of Deluxe Unit product cost of Regular 2. An intern suggested that the company use activity-based costing to cost its products. A team was formed to investigate this idea, and it ca me back with the recommendation that four activity cost pools be used. These cost pools and their associated activities follow: _ _ Estimated Activity Act1v1ty Cost Pool and- (Warhead Activity Measure Cost Deluxe Regular Total Purchase orders (number of orders) $ 261,999 1,299 1,799 2,999 Rework requests (number of requests) 345,999 599 1,999 1,599 Product testing (number of tests) 175,999 5,999 12,599 17,599 Machine related (machine-hours} 929,999 18,999 28,999 46,999 eBook $1,791,999 Compute the activity rate (i.e., predetermined overhead rate) for each of the activity cost pools. Purchase orders per order per request per test per MH Rework requests Product testing Machine related 3. Assume that actual activity is as expected for the year. Using activity-based costing, do the following: a. Determine the total amount of overhead that would be applied to each model for the year. (Do not round intermediate calculations and round your nal answers to nearest whole dollar amount.) Total overhead cost eBook [3. Compute the unit product cost for one unit of each model. (Do not round intermediate calculations and round your answers to 2 decimal places.) Unit product cost