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: Direct Labor- Hours per Unit 3.0 1.0 Annual Production 4,000 units 12,000 units Model N 800 XL Model N 500 Total Direct Labor-Hours 12,000 12,000 24,000 Additional information about the company follows: a. Model N 800 XL requires $85 in direct materials per unit, and Model N 500 requires $35. b. The direct labor wage rate is $17 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 stimated Overhead Cost $ 435,000 171,000 1,554,000 $ 2,160,000 Activity Measure Number of setups Machine-hours Direct labor-hours Model N800 XL 90 18,000 12,000 Expected Activity Model N500 200 0 12,000 Total 290 18,000 24,000 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 IA 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. (Round your answer to 2 decimal places.) Predetermined overhead rate per DLH Reg 1A Req 1B > Direct Labor- Hours per Unit 3.0 1.0 Annual Production 4,000 units 12,000 units Model N 800 XL Model N 500 Total Direct Labor-Hours 12,000 12,000 24,000 Additional information about the company follows: a. Model N 800 XL requires $85 in direct materials per unit, and Model N 500 requires $35. b. The direct labor wage rate is $17 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 $ 435,000 171,000 1,554,000 $ 2,160,000 Activity Measure Number of setups Machine-hours Direct labor-hours Model N 800 XL 90 18,000 12,000 Expected Activity Model N500 200 0 12,000 Total 290 18,000 24,000 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 IA 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. (Round your answers to 2 decimal places.) Model N 800 XL Model N 500
