0 Rocky Mountain Corporation makes two types of hiking boots- Xactive and Pathbr

Question

0 Rocky Mountain Corporation makes two types of hiking boots- Xactive and Pathbreaker. Data concerning these two product lines appear below Xactive 65.10 $ 18.50 Pathbreaker $ 51.30 $ 13.30 Direct materials per unit Direct labor cost per unit Direct labor-hours per unit Estimated annual production and sales 1.4 DLHs 28,000 units 1 DLHs 78,000 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 Estimated total direct labor-hours $2,379,160 117 200 DLHs Required 1-a. Compute the predetermined overhead rate based on direct labor hours (Round the intermediate

Explanation / Answer

Solution 1a:

Estimated total manufacturing overhead = $2,379,160

Estimated direct labor hours = 117200 DL hours

Predetermined overhead rate = Estimated total manufacturing overhead / Estimated direct labor hours

= $2,379,160/ 117200 = $20.30 per DLH

Solution 1b:

Computation of unit Product Cost Particulars X active Pathbreaker Direct materials per unit $65.10 $51.30 Direct labor cost per unit $18.50 $13.30 Manufacturing overhead per unit
X active = 1.4 DLH * $20.30
Pathbreaker = 1DLH * $20.30 $28.42 $20.30 Unit Product Cost $112.02 $84.90

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