Rocky Mountain Corporation makes two types of hiking boots--Xactive and Pathbreaker. Data Concerning these two product lines appear below: Xactive Pathbreaker Direct materials per unit $64.80 $51.00 Direct labor cost per unit $18.20 $13.00

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

	Xactive	Pathbreaker
Direct materials per unit	$64.80	$51.00
Direct labor cost per unit	$18.20	$13.00
Direct labor-hours per unit	1.4 DLHs	1.0 DLHs
Estimated annual production and sales	25,000 units	75,000 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	$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 it 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.

	Estimated Overhead Cost	Expected Activity
Activities and Activity Measures	Estimated Overhead Cost	Xactive	Pathbreaker	Total
Supporting direct labor (direct labor-hours)	$ 797,500	35,000	75,000	110,000
Batch setups (setups)	680,000	250	150	400
Product sustaining (number of products)	650,000	1	1	2
General factory (machine hours)	72,500	2,500	7,500	10,000
Total manufacturing overhead cost	$2,200,000