Question
Rocky Mountain Corporation makes two types of hiking boots-Xactive and Pathbreaker. Data concerning these two product lines appear below: Direct materials per unit Direct
Rocky Mountain Corporation makes two types of hiking boots-Xactive and Pathbreaker. Data concerning these two product lines appear below: Direct materials per unit Direct labor cost per unit Direct labor-hours per unit Estimated annual production and sales Xactive $ 65.00 $ 18.40 Pathbreaker $ 51.20 $ 13.20 1.4 DL 27,000 units 1 DL 77,000 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 $2,318,960 114,800 DLH 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: 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 Estimated Overhead Cost $843,780 Expected Activity 756,000 642,740 Xactive Pathbreaker 37,800 260 1 77,000 160 1 Total 114,800 420 2 76,440 $2,318,960 2,700 7,700 10,400 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 1A Req 18 Reg 2 Req 3 Compute the predetermined overhead rate based on direct labor-hours. (Round your answer to 2 decimal places.) Predetermined overhead rain per DLH
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