O | ? eztamheducation.comhm.tpx Rocky Mountain Corporation makes two types of hi

Question

O | ? eztamheducation.comhm.tpx Rocky Mountain Corporation makes two types of hiking boots-Xactive and Pathbreaker. Data concerning these two product lines appear below Direct materials per unit Direct labor cost per unit Direct labor-hours per unit Estimated annual production and sales XactivePathbreaker S 6420 s 17.60 $ 50.40 S 12.40 1.4 DLHs 19,000 units DLHs 69,000 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 Estimated total direct labor-hours $1,854 640 95,600 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.) 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 Uni 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

Explanation / Answer

1(a) Computation of Predetermine Overhead Rate Estimated Total Manufacturing Overhead $1,854,640 Estimated Total Direct Labour Hour 95600 DLH Predetermined Overhed Rate $19.40 1(b) Computation of Unit Product Cost Xactive Pathbreaker Direct Material $64.20 $50.40 Direct Labour $17.60 $12.40 Manufacturing Overhead $27.16 $19.40 Total Cost $108.96 $82.20 2(a)Computation of Activity rate for each activity Activities Cost Driver Activity Pool Cost Pool Overhead Rate Supporting Direct Labour Direct Labour Hours 95600 664420 6.95 Batch Setup Setup 340 476000 1400 Product Suistaining Number of Product 2 653060 326530 General Factory Machine Hour 8800 61160 6.95 2(b) Computation of Unit Product Cost Xactive Pathbreaker Direct Material $64.20 $50.40 Direct Labour $17.60 $12.40 Allocated Cost /Unit $43.82 $14.81 Total Cost $125.62 $77.61

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