Two brothers, very interested in fashion/especially men's wear, started their own company named Tiber a few years ago. The main products - traditional men's suits - are produced in a very high quality and sold in luxury men's stores in EU and the Middle East. The head office is located in Milan, Italy, to attract the best designers and tailors. Recently a new production facility has opened in Cairo. The business plan for this plant calls for 325 tailors, who will work 2,000 hours a year. Overhead is allocated to individual suits (products) based on the number of direct labor hours used to produce a suit. The plant use a flexible overhead budget to estimate its overhead rate. Fixed manufacturing overhead next year is budgeted at 33,865 mill. and variable overhead is budgeted at 20 per direct labor hour. The scheduled and budgeted production for next year is as follows: Tibor's Planned Production Schedule and Budgeted Direct Labor Hours per Suit Style Next Year Budgeted Direct Labor Hours per Suit 2.0 Suit Model Production Budget Model (Number of Suits) 22,100 55,900 80,600 63,700 52,000 MOUD 3.0 1.0 4.0 2.5 Required: 1. Calculate Tibor's overhead rate for the coming year using expected volume. 2. Calculate Tibor's overhead rate for the coming year using normal volume. 3. Describe why these two calculations do not come up with the same result and gives the pros and cons for both of the two methods. 4. Which method will you recommend the management of Tibor to use in their calculations? And why