Sin Corp. has been in operation for 5 years. The company produces bats which are used for the sport of baseball. Each year the company calculates a predetermined overhead rate which it uses to allocated its manufacturing overhead costs in the month of January. The companys costs fluctuate quite significantly in relation to the amount of actual costs as determined at the end of the year. The companys sales are relatively consistent except for in the spring (mostly the 2^nd quarter) and in the fall months (mostly the 3^rd quarter). Every year the companys manufacturing overhead costs are significantly overstated or understated.

Required: Discuss 2 issues you have identified which could explain the reason for the significant fluctuations from year to year. Provide at least one solution which could help address the issues you have identified.