Problem 3A-4 (Algo) Activity-Based Absorption Costing as an Alternative to Traditional Product Costing [LO3-5] Ellix Company manufactures two models of ultra-high fidelity speakersthe X200 model and the X99 model. Data regarding the two products follow: Product Direct Labor-Hours Annual Production Total Direct Labor-Hours X200 0.4 DLHs per unit 19,000 units 7,600 DLHs X99 0.6 DLHs per unit 48,000 units 28,800 DLHs 36,400 DLHs Additional information about the company follows: a. Model X200 requires $30 in direct materials per unit, and model X99 requires $25. b. The direct labor workers are paid $50 per hour. c. The company has always used direct labor-hours as the base for applying manufacturing overhead cost to products. d. Model X200 is more complex to manufacture than model X99 and requires the use of special equipment. e. Because of the special work required in (d) above, the company is considering the use of activity-based absorption costing to apply manufacturing overhead cost to products. Three activity cost pools have been identified as follows: Estimated Total Activity Activity Cost Pool Activity Measure Estimated Total Cost X200 X99 Total Machine setups Number of setups $ 192,000 96 144 240 Special processing Machine-hours 288,000 960 0 960 General factory Direct labor-hours 2,912,000 7,600 28,800 36,400 $ 3,392,000 Required: 1. Assume that the company continues to use direct labor-hours as the base for applying overhead cost to products. a. Compute the plantwide predetermined overhead rate. b. Compute the unit product cost of each model. 2. Assume that the company decides to use activity-based absorption costing to apply overhead cost to products. a. Compute the activity rate for each activity cost pool and determine the amount of overhead cost that would be applied to each model using the activity-based approach. b. Compute the unit product cost of each model.