Exercise 4-10 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 Xactive Pathbreaker $ 50.00 $ 12.00 Direct materials per unit Direct labor cost per unit Direct labor-hours per unit Estimated annual production and sales $ 63.80 $ 17.20 1.4 DLHs 1 DLHs 15,000 units 65,000 units 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 $1,634,000 86,000 DLHs 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 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 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 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 Expected Activit Estimated Activity Cost Pools and Activity Measures Supporting direct labor (direct labor-hours) Batch setups (setups) Product sustaining (number of products) General factory (machine-hours) Total manufacturing overhead cost Overhead Cost Xactive Pathbreaker Total 65,000 86, 000 300 $ 580,500 360,000 639,500 54,000 $1,634, 000 21,000 200 100 1,500 6,500 8,000 Determine the activity rate for each of the four activity cost pools 3. Using the activity rates and other data from the problem, determine the unit product cost of each product. Complete this question by entering your answers in the tabs below. Req 2 Req 3 Req 1A Req 1B Compute the predetermined overhead rate based on direct labor-hours. (Round your answer to 2 decimal places.) Predetermined overhead rate per DLH Req 1B Req 1A Req 2 Req 3 Req 1A Req 1B Using the predetermined overhead rate and other data from the problem, determine the unit product cost of each product. (Round your intermediate calculations and final answers to 2 decimal places.) Xactive Pathbreaker Unit product cost Req 1A Req 2 Complete this question by entering your answers in the tabs below Req 2 Req 3 Req 1A Req 1B Determine the activity rate for each of the four activity cost pools. (Round your "per DLH" and "per MHR" answers to 2 decimal places.) Activity Cost Pools Supporting direct labor Batch setups Product sustaining General factory Activity Rate per DLH per setup per product per MHR Req 1B Complete this question by entering your answers in the tabs below Req 1A Req 1B Req 2 Req 3 Using the activity rates and other data from the problem, determine the unit product cost of each product. (Round your intermediate calculations and final answers to 2 decimal places.) Xactive Pathbreaker Unit product cost Req 2 Req 3
