Exercise $4-10($Algo$)$ Contrasting ABC and Conventional Product Costs $[$L$04-2,$ LO$4-3,$ LO$4-4]$

Rocky Mountain Corporation makes two types of hiking boots$-$Xactive and Pathbreaker. Data concerning these two product I

appear below:

The company has a conventional costing system in which manufacturing overhead is applied to units based on direct labor$-$hc

Data concerning manufacturing overhead and direct labor$-$hours for the upcoming year appear below:

Estimated total manufacturing overhead

Estimated total direct labor$-$hours

$$1,911,000$

$98,000DLHs$

Required:

$1-$a$.$ Compute the predetermined overhead rate based on direct labor$-$hours.

$1-$b$.$ Using the predetermined overhead rate and other data from the problem, determine the unit product cost of each produc

The company is considering replacing its conventional costing system with an activity$-$based costing system that would ass

manufacturing overhead to the following four activity cost pools:

Determine the activity rate for each of the four activity cost pools.

Using the activity rates and other data from the problem, determine the unit product cost of each product.