Rocky Mountain Corporation makes two types of hiking boots$-$Xactive and Pathbreaker. Data concerning these two product lines appear below:

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

$$2,200,000$

$110,000DLHs$

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 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:

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

Predetermined overhead rate

$$,20$

per

DLH