Vieoatg Sdn Bhd manufactures a product that is available in two models, Future and Traditional Traditional has been around for quite sometime and Future has just been introduced recently. Since the introduction of future model the company's profits have steady declined and the management has become concerned about the accuracy of its costing system. Meanwhile, sales of the Future mode have been increasing rapidly. Overhead is applied to products on the basis of direct labor hours. At the beginning of the current year, the management strated that RM300,000 overhead costs would be incurred and the company would produce and sell 500 units of the Future model and som units of the Traditional model Future model requires 2.0 hours of direct labor time per unit and Traditional model request how While, direct materials and labor costs per unit are as follows: Future (RM) Traditional 30.00 110.00 Direct material costs per unit Direct labor cost per unit 30.00 Required: a) Compute the predetermined overhead rate using direct labor-hours as the basis for allocating overhead costs to products. Compute the unit product cost for one unit of each model (6 marks) b) The management is aware that something is not right with the existing costing system and has instructed a special team to come with another costing system as follows: Expected Activity Future Traditional Estimated Total Activity Cost Pool and Activity Measure Overhead Cost (RM) 20,000 100 300 400 10,000 60 140 200 Purchase orders (number of orders) Rework requests (number of requests) Product testing (number of tests) Machine-related (machine-hours) 210,000 900 1,200 2,100 4,000 360,000 1,500 2,500 600.000 Compute the activity rate for each of the activity cost pools. mark Determine the total amount of overhead that would be assigned to each model for the year d) Compute the unit product cost for one unit of each model e) Explain why do you think the company's profits are declining