Rocky Mountain Corporation makes two types of hiking boots—Xactive and Pathbreaker. Data concerning these two product lines appear below: Xactive Pathbreaker Direct materials per unit $ 64.00 $ 50.20 Direct labor cost per unit $ 17.40 $ 12.20 Direct labor-hours per unit 1.4 DLHs 1 DLHs Estimated annual production and sales 17,000 units 67,000 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 $1,743,360 Estimated total direct labor-hours 90,800 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) 621,980 23,800 67,000 90,800
Batch setups (setups) 416,000 210 110 320
Product sustaining (number of products) 647,840 1 1 2
General factory (machine-hours) 57,540 1,700 6,700 8,400
Total manufacturing overhead cost $ 1,743,360
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