Question

# Puget World, Inc., manufactures two models of television sets, the N 800 XL model and the...

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 Annual Production Total Direct Labor-Hours Model N 800 XL 3.0 4,000 units 12,000 Model N 500 1.0 12,000 units 12,000 24,000

a. Model N 800 XL requires \$90 in direct materials per unit, and Model N 500 requires \$40.

b. The direct labor wage rate is \$18 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 Activity Measure Estimated Overhead Cost Machine setups Number of setups \$ 410,000 Special processing Machine-hours 190,000 General factory Direct labor-hours 1,680,000 \$ 2,280,000
 Expected Activity Activity Measure Model N 800 XL Model N 500 Total Number of setups 160 240 400 Machine-hours 20,000 0 20,000 Direct labor-hours 12,000 12,000 24,000

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.)

Assume that the company continues to use direct labor-hours as the base for applying overhead cost to products. Compute the unit product cost of each model. (Round your answers to 2 decimal places.)

 Model N 800 XL Model N 500

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.)

 Machine setup per setup Special processing per MH General factory per DLH

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

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

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