Chapter 7, Problem 7-17.

Questions are listed below this paragraph note:

Again, the solutions manual offers no solution. This problem is in Chapter 7, Problem 7-17. The Chapter 7 Applying Excel problem was my previous asked question for help with proper formulas. I do not want to be penalized for my questions to post option that is offered per subscription with no assistance at all in the solutions manual in which I already paid to subscribe; but not offered solutions in the manual and forced to post a question for an expert. Please do not subtract my questions per subscription due to the problems with no answers or steps to solve the problems that should be in the solutions manual already, per my paid subscription agreement.

QUESTION:

Smoky Mountain Corporation makes two types of hiking bootsXtreme and the Pathfinder. Data concerning these two product lines appear below:

	Xtreme			Pathfinder
Selling price per unit	$	120.00		$	87.00
Direct materials per unit	$	65.20		$	51.00
Direct labor per unit	$	11.20		$	8.00
Direct labor-hours per unit		1.4	DLHs		1.0	DLHs
Estimated annual production and sales		30,000	units		65,000	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	$2,033,000
Estimated total direct labor-hours	107,000 DLHs

Required:
1.	Compute the product margins for the Xtreme and the Pathfinder products under the companys 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)	$	631,300	42,000	65,000	107,000
Batch setups (setups)		876,000	410	320	730
Product sustaining (number of products)		460,000	1	1	2
Other		65,700	NA	NA	NA
Total manufacturing overhead cost	$	2,033,000

Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system. (Negative customer margins should be indicated with a minus sign. Round your intermediate calculations to 2 decimal places.)

3.	Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Do not round intermediate calculations. Round your "Percentage" answer to 1 decimal place. (i.e. .1234 should be entered as 12.3))