TeleTech Corporation manufactures two different color printers for the business market. Cost estimates for the two models for the current year are as follows Each model of printer requires 20 hours of direct labor. The basic system requires 5 hours in department A and 15 hours in department B. The advanced system requires 15 hours in department A and 5 hours in department B. The overhead costs budgeted in these two production departments are as follows: The firm's manapement expects to operate at a level of 20,000 direct labor hours in each production department during the current year. (This estimate is based on the practical capacity of each department.) Required: 1. Show how the compary's predetermined overhead rate was determined. 2. If the firm prices each model of color printer at 10 percent over its cost, what will be the price of each model? 3. Suppose the compary were to use departmental predetermined overiead rates. Calculate the rate for each of the two production departments. 4. Compute the product cost of each model usine the depatmental overhead rates calculated in requirement 3 5. Compute the price to be charged for each model, assuming the company continues to price each product at 10 percent above cost. Use the revised product costs calculated in requirement 4. 6. Write a memo to the president of Tele Tech Corporation makine a recommendation as to whether the flrm should use a plantwide overhead rate or departmental rates. Consider the potential implications of the ovechead rates ard the firm's pricige policy. How might these considerations affect the firm's ability to competo in the marketplace