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 Model N 800 XL Model N 500 3.0 1.0 Annual Production 2,500 units 11,000 units Total Direct Labor-Hours 7,500 11,000 18,500 Additional information about the company follows: a. Model N 800 XL requires $75 in direct materials per unit, and Model N 500 requires $25. b. The direct labor wage rate is $15 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 $ 380,000 175,000 925,000 $ 1,480,000 Activity Measure Number of setups Machine-hours Direct labor-hours Model N 800 XL 160 17,500 7,500 Expected Activity Model N 500 220 0 11,000 Total 380 17,500 18,500 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