Question

Exercise 4-10 Contrasting ABC and Conventional Product Costs (L04-2, L04-3, L04-4) 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 $ 64.50 $ 17.90 1.4 DLHS 22,000 units Pathbreaker $ 50.70 $ 12.70 1 DLHS 72,000 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 $2,025, 160 102,800 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 Cost Xactive Pathbreaker Total Supporting direct labor (direct labor-hours) $ 729,880 30,800 72,000 Batch setups (setups) 102,800 573,500 235 370 Product sustaining number of products) 655,040 General factory (nachine-hours) 66, 740 2,200 7,200 9.400 Total manufacturing overhead cost $2,025, 160 135 1 2

4 part accounting question

Answer 1