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: Model N 800 XL Model N 500 Direct Labor- Hours per Unit 4.0 2.0 Total Direct Annual Production Labor-Hours 3,000 units 12,000 11,000 units 22,000 34,000 Additional information about the company follows: a. Model N 800 XL requires $85 in direct materials per unit, and Model N 500 requires $45. b. The direct labor wage rate is $20 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 $ 770,000 250,000 1,530,000 $ 2,550,000 Activity Measure Number of setups Machine-hours Direct labor-hours Model N 800 XL 125 20,000 12,000 Expected Activity Model N 500 Total 225 350 0 20,000 22,000 34,000