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Required information [The following information applies to the questions displayed below. Puget World, Inc., manufactures two models of television sets, the N 800 XL model

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Required information [The following information applies to the questions displayed below. Puget World, Inc., 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 4.0 1.0 Annual Production 5,000 units 14,000 units Total Direct Labor-Hours 20,000 14,000 34.000 Additional information about the company follows: Model N 800 XL requires $80 in direct materials per unit, and Model N 500 requires a. $40. b. The direct labor wage rate is $19 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 Activity Cost Pool Measure Machine setups Number of setups Special processing Machine-hours General factory Direct labor hours Estimated Overhead Cost $ 690,000 245,000 2,193,000 $3,128,000 Expected Activity Model N 800 Model N Activity Measure Total XL 500 Number of 180 280 460 setups Machine-hours 17,500 0 17,500 Direct labor- hours 20,000 14,000 34,000 Required: 1. 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.) a. Predetermined overhead rate per DLH b. Compute the unit product cost of each model. (Round your answers to 2 decimal places.) Model N 800 XL Model N 500 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. (Round your answers to 2 decimal places.) per setup Machine setup Special processing General factory per MH per DLH a(2) Determine the amount of overhead cost that would be assigned to each model using the activity-based costing system. (Round your answers to 2 decimal places.) Model N 800 XL Model N 500 Overhead cost per unit b. Compute the unit product cost of each model. (Round your answers to 2 decimal places.) Model N 800 XL Model N 500 Unit product cost

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