Required information

Problem $4-17($Static$)$ Contrast Activity$-$Based Costing and Conventional Product Costing $[$LO$4-2,$ LO$4-3,[04-4]$

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

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

$\backslash$table$[[,\backslash$table$[[$Direct Labor$-],[$Hours per Unit$]],\backslash$table$[[$Total$],[$Direct$]],],[$Model N $800$ XL$,3\mathrm{.}0,3,000$ units,$9,000],[$Model N $500,1\mathrm{.}0,12,000$ units,$12,000],[,,,21,000]]$

Additional information about the company follows:

a$.$ Model $N800xL$ requires $$75$ in direct materials per unit, and Model $N500$ requires $$25.$

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:

$\backslash$table$[[$Activity Cost Pool,Activity Measure,$\backslash$table$[[$Estimated$],[$Overhead Cost$]]],[$Machine setups,Number of setups,$$360,000$