question archive Rocky Mountain Corporation makes two types of hiking boots Xactive and the Pathbreaker
Subject:AccountingPrice:2.87 Bought7
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 | $ | 64.60 | $ | 50.80 | ||
Direct labor cost per unit | $ | 18.00 | $ | 12.80 | ||
Direct labor-hours per unit | 1.4 | DLHs | 1.0 | DLHs | ||
Estimated annual production and sales | 23,000 | units | 73,000 | 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 | $2,082,960 | |
Estimated total direct labor-hours | 105,200 | DLHs |
Required: | |
1-a. | Compute the predetermined overhead rate based on direct labor-hours. |
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. |
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: |
Activities and Activity Measures | Estimated Overhead Cost |
Expected Activity | ||||
Xactive | Pathbreaker | Total | ||||
Supporting direct labor (direct labor-hours) | $ | 752180 | 32200 | 73,000 | 105,200 | |
Batch setups (setups) | 608,000 | 240 | 140 | 380 | ||
Product sustaining (number of products) | 654,140 | 1 | 1 | 2 | ||
General factory (machine-hours) | 68,640 | 2,300 | 7,300 | 9,600 | ||
Total manufacturing overhead cost | $ | 2,082,960 | ||||
Determine the activity rate for each of the four activity cost pools.(Round your 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. (Do not round intermediate calculations. Round your answers to 2 decimal places.) |
Xactive | Pathbreaker | |
Unit product cost | $ | $ |
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