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Problem 3-17A Contrast Activity-Based Costing and Conventional Product Costs [LO3-2, LO3-3, LO3-4] [The following information applies to the questions displayed below.] 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 3,000 units 9,000 Model N 500 1.4 15,000 units 21,000 30,000 Additional information about the company follows: a. Model N 800 XL requires $90 in direct materials per unit, and Model N 500 requires $45. b. The direct labor wage rate is $15 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 $ 480,000 Special processing Machine-hours 225,000 General factory Direct labor-hours 1,815,000 $ 2,520,000 Expected Activity Activity Measure Model N 800 XL Model N 500 Total Number of setups 160 240 400 Machine-hours 15,000 0 15,000 Direct labor-hours 9,000 21,000 30,000 References Section BreakProblem 3-17A Contrast Activity-Based Costing and Conventional Product Costs [LO3-2, LO3-3, LO3-4] 5.value: 1.66 pointsRequired information Problem 3-17A Part 1 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. (Round your answer to 2 decimal places.) b. Compute the unit product cost of each model. (Round your answers to 2 decimal places.)

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