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He Smoky Mountain Corporation makes two types of hiking boots--the Xtreme and the Pathfinder. Dato concerning these two product lines appear below. Selling price per
He Smoky Mountain Corporation makes two types of hiking boots--the Xtreme and the Pathfinder. Dato concerning these two product lines appear below. Selling price per unit Direct materials per unit Direct labor per unit Direct labor-hours per unit Estimated annual production and sales Xtreme $120.00 $63.30 $ 17.00 1.7 DLHS 22,800 units Pathfinder $ 87.80 $ 52.00 $ 10.00 1. DLHS 76, 800 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 Estimated total direct labor.hours $1,927,800 113, 400 DHS 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) Activities and Activity Measures Supporting direct labor (direct labor-hours) Batch setups (setups) Product sustaining (number of products) other Total manufacturing overhead cost Estimated Overhead Cost $ 703, 080 400.000 700.000 46,720 $ 1,927.80 Expected Activity Xtreme Pathfinder Total 37,400 76.000 113,400 220 400 12 1 2 NA NA NA 180 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 Activities and Activity Measures Expected Activity Overhead Cost Xtreme Pathfinder Supporting direct labor (direct labor-hours) Total 703, 080 Batch setups (setups) 37,400 76, eee 113,400 480,000 220 180 400 Product sustaining (number of products) 700,000 2 Other 44, 720 NA Total manufacturing overhead cost $ 1,927,800 $ 1 1 NA NA 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 company's traditional costing system. (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.) Xtreme Pathfinder Total Required 1 Required 2 Required 3 Compute the product margins for the Xtreme and the Pathfinder products under the company's traditional costing system. (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.) Xtreme Pathfinder Total Product margir Required 25 Complete this question by entering your answers in the tabs below. Required 1 Aquired 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 (Required 1 Required 3 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Riquired Prepare a quantitative comparison of the traditional and activity based cost assignments. (Round your intermediate calculations to 2 decimal places and "Percentage" answers to 1 decimal place) Xtreme Pathfinder Amount Total Amount Amount of Total Amount Traditional Cost System Amount 06 Total cost assigned to products Xtreme Pathfinder Total
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