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Seco, Inc., produces two types of clothes dryers: deluxe andregular. Seco uses a plantwide rate based on direct labor hours toassign its overhead costs. The

Seco, Inc., produces two types of clothes dryers: deluxe andregular. Seco uses a plantwide rate based on direct labor hours toassign its overhead costs. The company has the following estimatedand actual data for the coming year:

Estimated overhead$1,872,000
Expected activity52,000
Actual activity (direct laborhours):
Deluxe dryer12,000
Regular dryer40,000
Units produced:
Deluxe dryer24,000
Regular dryer200,000

Required:

1. Calculate the predetermined plantwideoverhead rate, using direct labor hours.
$ ______________per hour

Calculate the applied overhead for each product, using directlabor hours.

Appliedoverhead
Deluxe$__________
Regular$__________

2. Calculate the overhead cost per unitfor each product. If required, round your answers to the nearestcent.

Overhead Cost
Deluxe_____________$ per unit
Regular_____________$ per unit

3. Whatif the deluxe product used 24,000 hours (toproduce 24,000 units) instead of 12,000 hours (total expected hoursremain the same)? Calculate the effect on the profitability of thisproduct line if all 24,000 units are sold.

Profits would (ncrease/ decrease) by $____________

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