Rocky Mountain Corporation makes two types of hiking bootsXactive and Pathbreaker. Data concerning these two product lines appear below:

	Xactive		Pathbreaker
Direct materials per unit	$ 65.40		$ 51.60
Direct labor cost per unit	$ 18.80		$ 13.60
Direct labor-hours per unit	1.4	DLHs	1	DLHs
Estimated annual production and sales	31,000	units	81,000	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	$2,562,640
Estimated total direct labor-hours	124,400	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:

Activity Cost Pools and (Activity Measures)	Estimated Overhead Cost	Expected Activity
		Xactive	Pathbreaker	Total
Supporting direct labor (direct labor-hours)	$ 939,220	43,400	81,000	124,400
Batch setups (setups)	920,000	280	180	460
Product sustaining (number of products)	618,860	1	1	2
General factory (machine-hours)	84,560	3,100	8,100	11,200
Total manufacturing overhead cost	$ 2,562,640

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.