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Rocky Mountain Corporation makes two types of hiking boots-Xactive and the Pathbreaker. Data concerning these two product lines appear below:


Xactive Pathbreaker
  Direct materials per unit $ 65.80
$ 52.00
  Direct labor cost per unit $ 19.20
$ 14.00
  Direct labor-hours per unit
1.4 DLHs
1 DLHs
  Estimated annual production and sales
35,000 units
85,000 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 $2,814,000
  Estimated total direct labor-hours 134,000 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.)
  Predetermined overhead rate   $  per DLH
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.)

Xactive Pathbreaker
  Unit product cost $    $   

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




Activities and Activity Measures 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. (Round your final answers to 2 decimal places.)

 

  Activity Cost Pools Activity Rate
  Supporting direct labor $ per DLH
  Batch setups $ per setup
  Product sustaining $ per product
  General factory $ per MH

 

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.)

 


 Xactive Pathbreaker
  Unit product cost $    $   

 

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M9957545

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