Question

Check my work 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 $ 64.70 $ 18.10 1.4 DLHS 24,000 units Pathbreaker $ 50.90 $ 12.90 1 DLHS 74,000 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 $2,141, 240 107,600 DLHS Required: 1-a. Compute the predetermined overhead rate based on direct labor-hours. 1-b. Using the predetermined overhead rate and other data from the problem, determine the unit product cost of each product 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 Expected Activity Activity Cost Pools and Activity Measures Overhead Coat Pathbreaker Total Supporting direct labor (direct labor-hours) $ 774,720 33,600 74,000 107,600 Batch setups (setups) 643,500 1 652,460 Product sustaining (number of products) 2,400 70,560 7.400 General factory (machine-hours) $2,141,240 Total manufacturing overhead cost Xactive 145 245 1 390 2

Answer 1

P20 Answers I @ predetermined overhead rate manufacturing out Total Direct labor hr -_ $2,141,240 107,600 DLHS = $19.9 prDLH 16 Direct material Pathbreaker 1550-90 Direct labour Xoactive $64.70 $18.10 $19.9x104 Ás 12.90 manufacturing of unit product cost $$19.9x1 $110.66 $83.70 Activity cost pool suppating direct labour batch setups product sustaining General factory Activity Rate $7.2 por DEH (4774,720/107,600) $1,650 persetup(643,500/390) 1326330 paproduct/6460/) $7.2 prm.H (70,560/9,800)

3 X-Active Pathbreaker Direct material $64.70 X24,000 $50.90x74,000 Direct labor $18.10% 24,000 $12.90x74,000 manufacturing on supporting De اه $7.2 X33,600 $712x74,000 & 1,650x.au5 $1,650x 145 $326p230x! $7.2 x 7,400 batch set up product sustaini sustaining $26,230x1 General factory. 7.2X3,400 Total product cost #2,976880 & no. of units. unit product cost $124.04 $5,872,760 24,000 74,000 $79.36