$[$The following information applies to the questions displayed below.$]$ 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.

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.

Puget World, Incorporated, manufactures two models of television sets, the N $800L$ model and the N $500$ model. Data

regarding the two products follow:

Additional information about the company follows:

a$.$ Model N $800$ XL requires $$65$ in direct materials per unit, and Model $N500$ requires $$25.$

b$.$ The direct labor wage rate is $$16$ 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:

Required:

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.

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