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 3.5 1.3 Model N 800 XL Model N 500 Annual Production 2,000 units 10,000 units Total Direct Labor-Hours 7,000 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 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. Reg 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.) per setup Machine setup Special processing General factory per MH per DLH 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 3.5 1.3 Model N 800 XL Model N 500 Annual Production 2,000 units 10,000 units Total Direct Labor-Hours 7,000 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 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. Reg 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.) per setup Machine setup Special processing General factory per MH per DLH
