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Rocky Mountain Corporation makes two types of hiking boots-Xactive and Pathbreaker. Data concerning these two product lin appear below: Direct materials per unit Direct
Rocky Mountain Corporation makes two types of hiking boots-Xactive and Pathbreaker. Data concerning these two product lin appear below: Direct materials per unit Direct labor cost per unit Direct labor-hours per unit Estimated annual production and sales Xactive $ 64.10 $ 17.50 Pathbreaker $ 50.30 $ 12.30 1.4 DLHS 18,000 units 1 DLHS 68,000 units The company has a conventional costing system in which manufacturing overhead is applied to units based on direct labor-hour Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below: Estimated total manufacturing overhead Estimated total direct labor-hours Required: $1,798,760 93,200 DLHS 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 manufacturing overhead to the following four activity cost pools: Activity Cost Pools and (Activity Measures) Supporting direct labor (direct labor-hours) Batch setups (setups) General factory (machine-hours) Product sustaining (number of products) Total manufacturing overhead cost Estimated Overhead Cost Expected Activity Xactive Pathbreaker 25,200 215 Total 1 68,000 115 1 93,200 330 2 59,340 1,800 6,800 8,600 $ 643,080 445,500 650,840 Determine the activity rate for each of the four activity cost pools. $ 1,798,760 3. Using the activity rates and other data from the problem, determine the unit product cost of each product.
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