Rocky Mountain Corporation makes two types of hiking boots-Xactive and Pathbreaker. Data concerning these two product lines appear below:

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 . . . . . . $2,200,000
Estimated total direct labor-hours . . . . . . . . . . . . 110,000 DLHs
Required:
1. Compute the predetermined overhead rate based on direct labor-hours. Using this 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:

Determine the activity rate for each of the four activity cost pools.
3. Using the activity rates and other data from the problem, determine the unit product cost of each product.
4. Explain why the conventional and activity-based cost assignments differ.

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Xactive Pathbreaker $64.80 $18.20 $51.00 $13.00 Direct labor cost per unit . . . . . . . . . . . . 1.4 DLHs 25,000 units 1.0 DLHs 75,000 units Estimated annual production and sales Expected Activity Pathbreaker 75,000 Estimated Activity Cost Pools and Activity Measures Overhead Cost Xactive Total $ 797,500 680,000 650,000 72,500 $2,200,000 Supporting direct labor (direct labor-hours) . . 35,000 250 110,000 150 400 2,500 7,500 10,000