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) and T500 under the Required: 1. Using Exhibit 6-13 as a guide, compute the product margins for the B300 and T500 un company's traditional

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) and T500 under the Required: 1. Using Exhibit 6-13 as a guide, compute the product margins for the B300 and T500 un company's traditional costing system. 2. Using Exhibit 6-11 as a guide, compute the product margins for B300 and T500 activity-based costing system. 3. Using Exhibit 6-14 as a guide, prepare a quantitative comparison of the traditional and based cost assignments. Explain why the traditional and activity-based cost assignments dire PROBLEM 6-17 Comparing Traditional and Activity-Based Product Margins (L06-1, L06-3, L06-4.LOS Smoky Mountain Corporation makes two types of hiking boots-Xtreme and the Pathfinder concerning these two product lines appear below: Xtreme Selling price per unit .......... Direct materials per unit....... Direct labor per unit.. Direct labor-hours per unit ........ Estimated annual production and sales ......... $140.00 $72.00 $24.00 2.0 DLHS 20,000 units Pathfinder $99.00 $53.00 $12.00 1.0 DLHS 80.000 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-bours for the upcoming year appear below: Estimated total manufacturing overhead ............ $1,980,000 Estimated total direct labor-hours .. . 120.000 DLHS Required: 1. Using Exhibit 6-13 as a guide, compute the product margins for the Xtreme and the Path finder 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 Expected Activity Estimated Activities (and Activity Measures) Overhead Cost Xtreme Pathfinder Total Supporting direct labor (direct labor-hours).... $ 783,600 4 0,000 80.000 120,000 Batch setups (setups) .......... 495.000 200 100 300 Product sustaining (number of products)...... 602.400 2 Other 99,000 NA NA Total manufacturing overhead cost............ $1,980,000 Activity-Based Costing: A Tool to Aid Decision Making Using Exhibit 6-11 as a guide, compute the product margins for the Xtreme and the Path- finder products under the activity-based costing system. 3. Using Exhibit 6-14 as a guide, prepare a quantitative comparison of the traditional and activity-based cost assignments. Explain why the traditional and activity-based cost assign- ments differ

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