Puget World, Incorporated, 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 Annual Production Model N 800 XL Model N 500 3.0 1.0 4,000 units 12,000 units Total Direct Labor-Hours 12,000 12,000 24,000 Additional information about the company follows: a. Model N 800 XL requires $90 in direct materials per unit, and Model N 500 requires $40. 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 $ 410,000 190,000 1,680,000 $ 2,280,000 Activity Measure Number of setups Machine-hours Direct labor-hours Required: Expected Activity Model N 800 XL 160 20,000 Model N 500 240 0 Total 400 12,000 12,000 20,000 24,000 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.