Rocky Mountain Outfitters manufactures cowboy boots. Information related to a recent production period is as follows:

During September, 500 pairs of boots were produced.
\section*{Required}
A. Using actual costing, what is the unit cost of one pair of boots produced during September?
B. Using normal costing, with machine hours as the activity base, what is the unit cost of one pair of boots produced during September?
C. If normal costing is used, was manufacturing overhead over- or underapplied during September? By how much?
D. What might have caused the amount of overhead applied to be different from the actual amount?
E. Why would managers at Rocky Mountain choose to use normal costing rather than actual costing?

Transcribed Image Text:

Estimated manufacturing overhead, 2004 $240,000 Estimated machine hours, 2004 12,000 Direct labor cost, September Direct materials cost, September $8,000 $5,000 Supervisor's salary, September Factory rent, September Factory utilities, September $3,000 $1,800 $800 Indirect materials cost, September Machine hours worked, September $2,000 400