4b

Smoky Mountain Corporation makes two types of hiking boots-the Xtreme and the Pathfinder. Data concerning these two product lines appear below: Xtreme Pathfinder Selling price per unit $ 121.00 $ 91. 00 Direct materials per unit $ 63. 70 $ 56.00 Direct labor per unit $ 8. 80 $ 8. 00 Direct labor-hours per unit 1. 1 DLHS 1. 0 DLHS Estimated annual production and sales 26,000 units 73, 000 units The company has a traditional 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, 133, 600 Estimated total direct labor-hours 101, 600 DLHS Required: 1. Compute the product margins for the Xtreme and the Pathfinder products under the company's traditional costing system. 2. The company is considering replacing its traditional costing system with an activity-based costing system that would assign its manufacturing overhead to the following four activity cost pools (the Other cost pool includes organization-sustaining costs and idle capacity costs): Estimated Expected Activity Activities and (Activity Measures) Overhead Cost Xtreme Pathfinder Total Supporting direct labor (direct labor-hours) $ 629, 920 28 , 600 73 , 000 101, 600 Batch setups (setups) 768, 000 260 220 480 Product sustaining (number of products) 710 , 000 Other 25 , 680 NA NA NA Total manufacturing overhead cost $ 2, 133, 600 Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system. 3. Prepare a quantitative comparison of the traditional and activity-based cost assignments. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system. (Round your intermediate calculations to 2 decimal places.) Xtreme Pathfinder Total Product margin