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 3.5 1.3 Model N 800 XL Model N 500 Total Direct Annual Production Labor-Hours 2,000 units 7,000 10,000 units 13,000 20,000 Additional information about the company follows: a. Model N 800 XL requires $70 in direct materials per unit, and Model N 500 requires $20. b. The direct labor wage rate is $14 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 $ 370,000 170,000 1,260,000 $ 1,800,000 Activity Measure Number of setups Machine-hours Direct labor-hours Model N 800 XL 165 17,000 7,000 Expected Activity Model N 500 205 0 13,000 Total 370 17,000 20,000 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 241 Req 242 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.) per setup Machine setup Special processing General factory per MH per DLH S Complete this question by entering your answers in the tabs below. Req 241 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. Reg 2A1 Req 242 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
