Sweeten Company had no jobs in progress at the beginning of the year and no beginning inventories. It started, completed, and sold only two jobs during the year$-$Job P and Job Q$.$ The company uses a plantwide predetermined overhead rate based on machine$-$hours. At the beginning of the year, it estimated that $4,000$ machine$-$hours would be required for the period's estimated level of production. Sweeten also estimated $$26,200$ of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $$2\mathrm{.}00$ per machine$-$hour.

Because Sweeten has two manufacturing departments$-$Molding and Fabrication$-$it is considering replacing its plantwide overhead rate with departmental rates that would also be based on machine$-$hours. The company gathered the following additional information to enable calculating departmental overhead rates:

$\backslash$table$[[,$Molding,Fabrication,Total$],[$Estimated total machine$-$hours used,$2,500,1,500,4,000],[$Estimated total fixed manufacturing overhead,$$10,750,$$$15,450,$$$26,200$

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

$$2,814,000$

$134,000DLHS$

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:

$\backslash$table$[[$Activity Cost Pools and $($Activity Measures$),$Estimated,Expected Activity$],[$Overhead Cost,Xactive,Pathbreaker,Total$],[$Supporting direct labor $($direct labor$-$hours$),$$$1,038,500,49,000,85$;$000,134,000],[$Batch setups $($setups$),1,100,000,300,200,500],[$Product sustaining $($number of products$),582,500,1,1,2],[$General factory $($machine$-$hours$),93,000,3,500,8,500,12,000],[$Total manufacturing overhead cost $-,$$$2,814,000,,,]]$

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 f ach product.

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