The company has a conventional costing system in which manufacturing overhead is
ID: 2491294 • Letter: T
Question
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:
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
Unit Product cost of Xactive =
Unit Product cost of PathBreaker=
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:
Supporting Direct Labor = per DLH
Batch setups = per setup
Product Sustaining = per product
General Factory = per MH
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.)
Unit Product Cost of Xactive =
Unit Product cost of Path Breaker =
Rocky Mountain Corporation makes two types of hiking boots—Xactive and Pathbreaker. Data concerning these two product lines appear below:Explanation / Answer
1-a:
1-b:
2.
Predetermined overhead rate = Estimated manufacturing overhead/Estimateddirect labour hours = 2501000/122000 = 20.50 Thus, predetermined overhead recovery rate is $ 20.5 per direct labour hour.