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

Exercise 3-10 Contrasting ABC and Conventional Product Costs [LO2, LO3, LO4]

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

	Xactive			Pathbreaker
Direct materials per unit	$	65.50		$	51.70
Direct labor cost per unit	$	18.90		$	13.70
Direct labor-hours per unit		1.4	DLHs		1	DLHs
Estimated annual production and sales		32,000	units		82,000	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	$2,624,760
Estimated total direct labor-hours	126,800	DLHs

Required:
1-a.	Compute the predetermined overhead rate based on direct labor-hours. (Round the intermediate calculations and final answer to two decimal places.)

Predetermined overhead rate

$  per DLH

                                                                                    20.70

1-b.	Using the predetermined overhead rate and other data from the problem, determine the unit product cost of each product. (Round the intermediate calculations and final answer to two decimal places.)

	Xactive	Pathbreaker
Unit product cost	$	$

                                                            113.38                        86.10

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 Overhead Cost	Expected Activity
Activities and Activity Measures		Xactive	Pathbreaker	Total

Supporting direct labor (direct labor-hours)	$	963,680	44,800	82,000	126,800
Batch setups (setups)		963,500	285	185	470
Product sustaining (number of products)		610,940	1	1	2
General factory (machine-hours)		86,640	3,200	8,200	11,400
Total manufacturing overhead cost	$	2,624,760

Determine the activity rate for each of the four activity cost pools. (Round your final answers to 2 decimal places.)

Activity Cost Pools	Activity Rate
Supporting direct labor	$	per DLH
Batch setups	$	per setup
Product sustaining	$	per product
General factory	$	per MH
7.60, 2050, 305470, 7.60

3.	Using the activity rates and other data from the problem, determine the unit product cost of each product. (Round the intermediate calculations and final answer to two decimal places.)

	Xactive	Pathbreaker
Unit product cost	$	$

                                                            123.60                         82.11