Predetermined overhead

Overhead is assigned to the products on a traditional basis of direct labor-hours. For 2013 the company estimated that it would incur $900,000 in overhead costs and product 5,000 units of the deluxe model and 40,000 units of the regular model. The deluxe model requires two hours of direct labor time, and the regular model requires one hour. Material and labor costs per unit are as follows: Compute the traditional predetermined overhead rate for 2013, and determine the cost to manufacture one unit of each model. Assume that the company's overhead costs can be traced to four major activities. These activities, and the amount of overhead cost traceable to each for 2013 arc given below: Determine the amount of overhead cost per event for each of the four activities above. Using the data presented or computed in (2) above and an activity costing approach, do the following. Determine the total amount of overhead cost assignable to each model for 2013. After these totals have been computed, determine the amount of overhead cost per unit of each model. Compute the total cost to manufacture one unit of each model (materials, labor, and overhead). |From the data you have developed in (1) through (3) above, identify factors that may account for the company's declining profits