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Exercise 4-10 (Algo) Contrasting ABC and Conventional Product Costs [LO4-2, LO4-3, LO4-4] Rocky Mountain Corporation makes two types of hiking boots-Xactive and Pathbreaker. Data
Exercise 4-10 (Algo) Contrasting ABC and Conventional Product Costs [LO4-2, LO4-3, LO4-4] Rocky Mountain Corporation makes two types of hiking boots-Xactive and Pathbreaker. Data concerning these two product lines appear below: Direct materials per unit Pathbreaker $ 50.00 $ 12.00 1.4 DLH 15,000 units 1 DL S 65,000 units ces Direct labor cost per unit Direct labor-hours per unit Estimated annual production and sales Xactive $ 63.80 $17.20 The company has a conventional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below. Estimated total manufacturing overhead Estimated total direct labor-hours Required: $1,634,000 86,000 DLH 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 product 2. The company is considering replacing its conventional costing system with an activity-based costing system that would assign its manufacturing overhead to the following four activity cost pools Activity Cost Pools and (Activity Measures) Dupporting direct labor (direct labor-houra) Batch setups (setups) Product sustaining (number of products) Estimated Overhead Cost Expected Activity 500,500 Xactive Pathbreaker 21,000 65,000 Total 86,000 360,000 200 639,500 100 1 300 2 54,000 1,500 6,500 $1,634,000 Petermine the state for nach of the fourth ca General factory (machine-hours) Total manufacturing overhead cost 8.000
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