Rocky Fountain Corporation makes two types of fountains-Solar and Electric. Data concerning these two product lines appear below: Solar Electric Direct materials per unit $15.00 $9.00 Direct labor cost per unit $6.00 $3.00 Direct labor-hours per unit 0.6 DLH 0.4 DLH Estimated annual production and sales 15,000 units 30,000 units Solars are more complex to manufacture than Electrics and each unit requires more time on the special equipment. 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 $483,000 Estimated total direct labor-hours 21,000 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: Estimated Overhead Cost Expected Activity Activity Cost Pools and Activity Measures Solar Electric Total Machine setups (setups) $15,000 120 80 200 Special processing (machine hours) $ 180,000 2,000 1,000 3,000 General factory (direct labor-hours) $288,000 6,000 8,400 14,400 Total manufacturing overhead cost $483,000 Determine the activity rate for each of the activity cost pools. 3. Using the activity rates and other data from the problem, determine the unit product cost of each product. 4. Assuming the new cost information is more accurate, what management decisions might change based on that new information. Essay Toolbar navigation BI U S EEEEE A