Question

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 Xactive $ 64.40 $ 17.80 1.4 DLHS 21,000 units Pathbreaker $ 50.60 $ 12.60 1 DLHS 71,000 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 $1,967,840 100,400 DLHS

Answer 1

Calculate unit product cost

	Xactive	Pathbreaker
Supporting direct labor	(707820/100400*29400) = 207270	500550
Batch setups	1500*230 = 345000	195000
Product sustaining	327580	327580
General factory	7.05*2100 = 14805	50055
Total overhead cost	894655	1073185
Unit	21000	71000
Overhead cost per unit	2.60	15.12
Direct material	64.40	50.60
Direct labor	17.80	12.60
Unit product cost	84.80	78.32