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- Total Direct Model N 800 XL Model N 500 Hours per Unit 3.5 1.2 Annual Production Labor-Hours 4,500 units 15,750 12,500 units 15,000 30,750 Additional information about the company follows: a. Model N 800 XL requires $60 in direct materials per unit, and Model N 500 requires $15. b. The direct labor wage rate is $19 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 $ 420,000 195,000 1,230,000 $ 1,845,000 Expected Activity Activity Measure Number of setups Machine-hours Direct labor-hours Model N 800 XL 120 15,000 15,750 Model N 500 300 Total 420 0 15,000 15,000 30,750 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.