chapter 4 question 7

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: Model N 800 XL Model N 500 Direct Labor Hours per Unit 3.0 2.0 Annual Production 3,000 units 10,000 units Total Direct Labor-Hours 9,000 20,000 29,000 Additional information about the company follows: a Model N 800 XL requires $60 in direct materials per unit, and Model N 500 requires $20, b. The direct labor wage rate is $22 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 $ 320,000 260,000 1,305,000 $1,885,000 Activity Measure Number of setups Machine hours Direct labor hours Model N 800 XL 80 16,000 9,000 Expected Activity Model N 500 170 0 20,000 Total 250 10,000 29,000 Required: 1. 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. Complete this question by entering your answers in the tabs below. Req 1A Reg 10 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.) Predetermined overhead rato per DLA RENA Req 18 > Required: 1. 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. Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B 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