Rocky Mountain Corporation makes two types of hiking bootsXactive and Pathbreaker. Data concerning these two...
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Accounting
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
$
63.90
$
50.10
Direct labor cost per unit
$
17.30
$
12.10
Direct labor-hours per unit
1.4
DLHs
1
DLHs
Estimated annual production and sales
16,000
units
66,000
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
$1,688,440
Estimated total direct labor-hours
88,400
DLHs
Required:
1-a.
Compute the predetermined overhead rate based on direct labor-hours. (Round the intermediate calculations and final answer to two decimal places.)
1-b.
Using the predetermined overhead rate and other data from the problem, determine the unit product cost of each product. (Round the intermediate calculations and final answer to two decimal places.)
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:
Estimated Overhead Cost
Expected Activity
Activity Cost Pools and Activity Measures
Xactive
Pathbreaker
Total
Supporting direct labor (direct labor-hours)
$
601,120
22,400
66,000
88,400
Batch setups (setups)
387,500
205
105
310
Product sustaining (number of products)
644,060
1
1
2
General factory (machine-hours)
55,760
1,600
6,600
8,200
Total manufacturing overhead cost
$
1,688,440
Determine the activity rate for each of the four activity cost pools. (Round your final answers to 2 decimal places.)
3.
Using the activity rates and other data from the problem, determine the unit product cost of each product. (Round the intermediate calculations and final answer to two decimal places.)
Figure out 3 please.
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