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 LaborHours 

Model N 800 XL  3.0  4,000 units  12,000 
Model N 500  1.0  12,000 units  12,000 
24,000  
Additional information about the company follows:
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 laborhours 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 activitybased 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  Machinehours  190,000  
General factory  Direct laborhours  1,680,000  
$  2,280,000  
Expected Activity 

Activity Measure  Model N 800 XL  Model N 500  Total 
Number of setups  160  240  400 
Machinehours  20,000  0  20,000 
Direct laborhours  12,000  12,000  24,000 
Assume that the company continues to use direct laborhours 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 laborhours as the base for applying overhead cost to products. Compute the unit product cost of each model. (Round your answers to 2 decimal places.)

Assume that the company decides to use activitybased costing to
assign manufacturing overhead cost to products. Compute the
activity rate for each activity cost pool. (Round your answers to 2
decimal places.)

Assume that the company decides to use activitybased costing to assign manufacturing overhead cost to products. Determine the amount of overhead cost that would be assigned to each model using the activitybased costing system. (Round your intermediate calculations and final answers to 2 decimal places.)

Assume that the company decides to use activitybased 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.)

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