Rocky Mountain Corporation makes two types of hiking boots-Xactive and Pathbreaker. Data concerning these two product...
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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 $ 65.50 $18.90 Estimated total manufacturing overhead Estimated total direct labor-hours 1.4 DLHS 32,000 units Pathbreaker $ 51.70 $ 13.70 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: $2,624,760 1 DLRS 82,000 units 126,800 DLH 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: Activity Cost Pools and (Activity Measures) Supporting direct labor (direct labor-hours) Batch setups (setups) Product sustaining (number of products) General factory (machine-hours) Total manufacturing overhead cost Estimated Overhead Cost $ 963,680 963,500 610,940 86,640 $ 2,624,760 Expected Activity Xactive Pathbreaker 44,800 285 1 3,200 82,000 185 1 8,200 Total 126,800 470 2 11,400 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. 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 $ 65.50 $18.90 Estimated total manufacturing overhead Estimated total direct labor-hours 1.4 DLHS 32,000 units Pathbreaker $ 51.70 $ 13.70 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: $2,624,760 1 DLRS 82,000 units 126,800 DLH 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: Activity Cost Pools and (Activity Measures) Supporting direct labor (direct labor-hours) Batch setups (setups) Product sustaining (number of products) General factory (machine-hours) Total manufacturing overhead cost Estimated Overhead Cost $ 963,680 963,500 610,940 86,640 $ 2,624,760 Expected Activity Xactive Pathbreaker 44,800 285 1 3,200 82,000 185 1 8,200 Total 126,800 470 2 11,400 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.
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1a To compute the predetermined overhead rate based on direct laborhours we divide the estimated total manufacturing overhead by the estimated total d... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-0078111006
14th edition
Authors: Ray Garrison, Eric Noreen and Peter Brewer
Posted Date:
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