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 Estimated total manufacturing overhead Estimated total direct labor-hours 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 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: Req 1A Req 1B Xactive 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: $64.10 $17.50 Req 2 Predetermined overhead rate 1.4 DLHS 18,000 units Complete this question by entering your answers in the tabs below. Req 3 Pathbreaker $50.30 $ 12.30 < Req 1A 1 DLHS 68,000 units $1,798,760 93,200 DLHS Estimated Overhead Cost $ 643,080 445,500 650,840 59,340 $ 1,798,760 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. Expected Activity Xactive 25,200 Req 1B > 215 1 1,800 Pathbreaker 68,000 115 1 6,800 Compute the predetermined overhead rate based on direct labor-hours. (Round your answer to 2 decimal places.) per DLH Total 93,200 330 2 8,600
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 Estimated total manufacturing overhead Estimated total direct labor-hours 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 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: Req 1A Req 1B Xactive 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: $64.10 $17.50 Req 2 Predetermined overhead rate 1.4 DLHS 18,000 units Complete this question by entering your answers in the tabs below. Req 3 Pathbreaker $50.30 $ 12.30 < Req 1A 1 DLHS 68,000 units $1,798,760 93,200 DLHS Estimated Overhead Cost $ 643,080 445,500 650,840 59,340 $ 1,798,760 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. Expected Activity Xactive 25,200 Req 1B > 215 1 1,800 Pathbreaker 68,000 115 1 6,800 Compute the predetermined overhead rate based on direct labor-hours. (Round your answer to 2 decimal places.) per DLH Total 93,200 330 2 8,600
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text: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
Estimated total manufacturing overhead
Estimated total direct labor-hours
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
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:
Req 1A
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:
Req 1B
Xactive
$ 64.10
$ 17.50
Req 2
Predetermined overhead rate
1.4 DLHS
18,000 units
Complete this question by entering your answers in the tabs below.
Req 3
Req 1A
Pathbreaker
$ 50.30
$ 12.30
1 DLHS
68,000 units
$1,798,760
93,200 DLHS
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.
Estimated
Overhead Cost
$ 643,080
445,500
650,840
59,340
$ 1,798,760
Req 1B
Expected Activity
Xactive
25, 200
215
1
1,800
Compute the predetermined overhead rate based on direct labor-hours. (Round your answer to 2 decimal places.)
per DLH
>
Pathbreaker
68,000
115
1
6,800
Total
93,200
330
2
8,600
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Step 1: Introduction of Activity base costing
VIEWStep 2: Calculation of the predetermined overhead rate based on direct labor-hours & unit product cost
VIEWStep 3: Calculation of the activity rate for each of the four activity cost pools.
VIEWStep 4: Calculation of the unit product cost of each product
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