Siegel Company manufactures a product available in a deluxe model and a regular model. The company has manufactured the regular model for years. The deluxe model was introduced several years ago to tap a new segment of the market. Since introduction of the deluxe model, the company's profits have steadily declined and management has become increasingly concerned about the accuracy of its costing system. Sales of the deluxe model have been increasing rapidly. Manufacturing overhead is assigned to products on the basis of direct labor-hours. For the current year, the company estimated it will incur $7,240,200 in manufacturing overhead cost and produce 21,000 units ofthe deluxe model and 127,000 units ofthe regular model. The deluxe model requires 2.0 direct laborrhours per unit, and the regular model requires 10 direct laborehour. Material and labor costs per unit are as follows: Model Deluxe Regular Direct materials $ 141 $ 108 Direct labor $ 12 $ 9 Required: la. Using direct labor-hours as the base for assigning manufacturing overhead cost to products, compute the predetermined overhead rate. 1-b. Determine the unit product cost of each model. 2. Management is considering using activitybased absorption costing to apply manufacturing overhead cost to products. The activity based system would have four activity cost pools: Estimated Activity Cost Pool Activity Measure Overhead Cost Purchasing Purchase orders issued $ 296,100 Processing Machinehours 4,590,000 Scrap or rework Scrap or rework orders issued 525,600 Shipping Number of Shipments 1,828,500 $ 7,240,200 Expected Activity Activity Measure Deluxe Regular Total Purchase orders issued 470 940 1,410 Machinehours 21,600 32,400 54,000 Scrap or rework orders issued 400 320 720 Number of shipments 6,360 9,540 15,900 Calculate an activity rate for each ofthe four activity cost pools. 3. Using the activity rates from part (2): a. Compute the total manufacturing overhead cost applied to each model. Also, calculate each model's manufacturing overhead ( per unit. b. Compute each model's unit product cost {including direct materials, direct labor, and manufacturing overhead)