Required information [The following information applies to the questions displayed below.] 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 Total Direct per Unit Annual Production Labor-Hours Model N 800 XL Model N 500 4.0 1.5 5,000 units 10,000 units 20,000 15,000 35,000 Additional information about the company follows: a. Model N 800 XL requires $65 in direct materials per unit, and Model N 500 requires $20. 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 $ 430,000 200,000 1,645,000 $ 2,275,000 Activity Measure Number of setups Machine-hours Direct labor-hours Expected Activity Model N 800 XL Model N 500 Total 140 260 400 16,000 0 16,000 20,000 15,000 35,000