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 2.5 1.0 Model N 800 XL Model N 500 Annual Production 6,000 units 15,000 units Total Direct Labor-Hours 15,000 15,000 30,000 Additional information about the company follows: a. Model N 800 XL requires $90 in direct materials per unit, and Model N 500 requires $50. b. The direct labor wage rate is $21 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 $ 540,000 255,000 1,485,000 $ 2,280,000 Activity Measure Number of setups Machine-hours Direct labor-hours Model N 800 XL 175 15,000 15,000 Expected Activity Model N 500 275 0 15,000 Total 450 15,000 30,000 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 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. (Round your answer to 2 decimal places.) Predetermined overhead rate Iper DLH 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 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 2.5 1.0 Model N 800 XL Model N 500 Annual Production 6,000 units 15,000 units Total Direct Labor-Hours 15,000 15,000 3 30,000 Additional information about the company follows: a. Model N 800 XL requires $90 in direct materials per unit, and Model N 500 requires $50. b. The direct labor wage rate is $21 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 $ 540,000 255,000 1,485,000 $ 2,280,000 Activity Measure Number of setups Machine-hours Direct labor-hours Model N 800 XL 175 15,000 15,000 Model N 500 275 0 15,000 Total 450 15,000 30,000 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 2A1 Req 2A2 Req 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. (Round your answers to 2 decimal places.) Machine setup per setup 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 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. (Round your intermediate calculations and final answers to 2 decimal places.) Model N 800 XL Model N 500 Overhead cost per unit Complete this question by entering your answers in the tabs below. Req 2A1 Req 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. (Round your intermediate calculations and final answers to 2 decimal places.) Model N 800 XL Model N 500 Unit product cost
