Manteca Inc. produces two types of speakers: Deluxe and regular. Manteca uses

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    Manteca Inc. produces two types of speakers: Deluxe and regular. Manteca uses a plantwide rate based on direct labor hours to assign its overhead costs. The
    company has the following estimated and actual data for the coming year:

    Estimated overhead $750000

    Expected Activity 25000

    Actual Activity (direct labor hours):

    Deluxe speaker 5000

    Regular speaker 20000

    Units produced:

    Deluxe speaker 10000

    Regular speaker 100000

    1. Calculate the predetermined plantwide overhead rate and the applied overhead for each product using labor hours.

    2. Calculate the overhead cost per unit for each product.

    3. What if the deluxe product used 10000 hours (to produce 10000 units) instead of 5000 hours (total expected hours remian the same)? Calculate the effect
    on the profitability of this product line if all 10000 units are sold and then discuss the implications of this outcome.

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