Problem 4-17 Contrast Activity-Based Costing and Conventional Product Costing (LO4-2, L04-3, L04-4) [The following information applies to the questions displayed below.) Puget World, Inc., manufactures two models of television sets, the N 800 XL model and the N 500 model. Data regarding the two products follow: Model N 800 XL Model N 500 Direct Labor- Total Direct Hours per Unit Annual Production Labor-Hours 3,000 units 9.000 12,000 units 12,000 21,000 Additional information about the company follows: a. Model N 800 XL requires $75 in direct materials per unit, and Model N 500 requires $25. b. The direct labor wage rate is $18 per hour. c. The company has always used direct labor-hours as the base for applying manufacturing overhead cost to products, d. Model N 800 XL is more complex to manufacture than Model N 500 and requires the use of special equipment. Consequently, the company is considering the use of activity based costing to assign manufacturing overhead cost to products. Three activity cost pools have been identified as follows: Activity Cost Pool Machine setups Special processing General factory Activity Measure Number of setups Machine-hours Direct labor-hours Estimated Overhead Cost $ 360,000 165,000 1,260,000 $ 1,785,000 Activity Measure Number of setups Machine-hours Direct Labor-hours Model N800 XL 100 16,500 9,000 Expected Activity Model N50D 200 Total 300 16,500 21,000 12,000 $ 1,785,000 Expected Activity Model N 500 200 Activity Measure Number of setups Machine-hours Direct labor-hours Model N 800 XL 100 16,500 9,000 Total 300 16,500 21,000 12,000 Problem 4-17 Part 2 2. Assume that the company decides to use activity-based costing to assign manufacturing overhead cost to products. a(1). Compute the activity rate for each activity cost pool. a(2). Determine the amount of overhead cost that would be assigned to each model using the activity-based costing system b. Compute the unit product cost of each model. Complete this question by entering your answers in the tabs below. Reg 2A1 Req 2A2 Reg 2B Assume that the company decides to use activity-based costing to assign manufacturing overhead cost to products. Compute the activity rate for each activity cost pool. Machine setup Special processing General factory per setup per MH per DLH $ 1,785,000 Expected Activity Model N500 200 Activity Measure Number of setups Machine-hours Direct labor-hours Model N 800 XL 100 16,500 9,000 Total 300 16,500 21,000 12,000 Problem 4-17 Part 2 2. Assume that the company decides to use activity-based costing to assign manufacturing overhead cost to products. a(1). Compute the activity rate for each activity cost pool. a(2). Determine the amount of overhead cost that would be assigned to each model using the activity-based costing system b. Compute the unit product cost of each model. Complete this question by entering your answers in the tabs below. Reg 2A1 Req 2A2 Req 2B Assume that the company decides to use activity-based costing to assign manufacturing overhead cost to products. Determine the amount of overhead cost that would be assigned to each model using the activity-based costing system. Model N 800 XL Model N 500 Overhead cost per unit $ 1,785,000 Expected Activity Model N 500 200 Activity Measure Number of setups Machine-hours Direct labor-hours Model N800 XL 100 16,500 9,000 Total 300 16,500 21,000 12,000 Problem 4-17 Part 2 2. Assume that the company decides to use activity-based costing to assign manufacturing overhead cost to products. a(1) Compute the activity rate for each activity cost pool. a(2). Determine the amount of overhead cost that would be assigned to each model using the activity-based costing system. b. Compute the unit product cost of each model. Complete this question by entering your answers in the tabs below. Req 241 Reg 2A2 Req 2B Assume that the company decides to use activity-based costing to assign manufacturing overhead cost to products. Compute the unit product cost of each model. Model N 800 XL Model N 500 Unit product cost Expected Activity Model N 500 200 Activity Measure Number of setups Machine-hours Direct labor-hours Model N 800 XL 100 16,500 9,000 Total 300 16,500 21,000 12,000 Problem 4-17 Part 1 Required: 1. Assume that the company continues to use direct labor-hours as the base for applying overhead cost to products, a. Compute the predetermined overhead rate. b. Compute the unit product cost of each model. Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Assume that the company continues to use direct labor-hours as the base for applying overhead cost to products. Compute the predetermined overhead rate. Predetermined overhead rate per DLH Activity Measure Number of setups Machine-hours Direct labor-hours Model N 800 XL 100 16,500 9,000 Expected Activity Model N 500 200 0 12,000 Total 300 16,500 21,000 Problem 4-17 Part 1 Required: 1. Assume that the company continues to use direct labor-hours as the base for applying overhead cost to products. a Compute the predetermined overhead rate. b. Compute the unit product cost of each model. Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Assume that the company continues to use direct labor-hours as the base for applying overhead cost to products. Compute the unit product cost of each model. Model N 800 XL Model N 500