Rocky Mountain Corporation makes two types of hikingboots—Xactive and Pathbreaker. Data concerning these two productlines appear below:

	Xactive			Pathbreaker
Direct materialsper unit	$	64.30		$	50.50
Direct laborcost per unit	$	17.70		$	12.50
Directlabor-hours per unit		1.4	DLHs		1	DLHs
Estimated annualproduction and sales		20,000	units		70,000	units

The company has a conventional costing system in whichmanufacturing overhead is applied to units based on directlabor-hours. Data concerning manufacturing overhead and directlabor-hours for the upcoming year appear below:

Estimated totalmanufacturing overhead	$1,911,000
Estimated totaldirect labor-hours	98,000	DLHs

Required:

1-a. Compute the predetermined overhead rate based on directlabor-hours.

1-b. Using the predetermined overhead rate and other data fromthe problem, determine the unit product cost of each product.

2. The company is considering replacing its conventional costingsystem with an activity-based costing system that would assign itsmanufacturing overhead to the following four activity costpools:

	Estimated OverheadCost			Expected Activity
Activity CostPools and Activity Measures				Xactive			Pathbreaker			Total
Supportingdirect labor (direct labor-hours)	$	686,000			28,000			70,000		98,000
Batch setups(setups)		507,500			225			125		350
Productsustaining (number of products)		654,500			1			1		2
General factory(machine-hours)		63,000			2,000			7,000		9,000
Totalmanufacturing overhead cost	$	1,911,000

Determine the activity rate for each of the four activity costpools.

3. Using the activity rates and other data from the problem,determine the unit product cost of each product.