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I need an answer for the attached within maximum 3 days Q1: RR Mountain Corporation makes two types of hiking boots - Xactive and the
I need an answer for the attached within maximum 3 days
Q1: RR Mountain Corporation makes two types of hiking boots - Xactive and the Pathbreaker. Data concerning these two product lines appears below: XACTIVE DIRECT MATERIALS PER UNIT $64.80 $18.20 DIRECT LABORHOURS PER UNIT 1.4 DLHs PATHBREAKER $51.00 $13.00 1.0 DLHs SELLING PRICE PER UNIT $127.00 $89.00 DIRECT LABOR PER UNIT ESTIMATED ANNUAL PRODUCTION AND SALES 25,000 units 75,000 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 $ 2,200,000 Estimated total direct labor hours 110,000 DLHs Required: 1. Compute the product margins for the X-active and the Pathbreaker products under the company's traditional costing system. 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 cost and idle capacity cost): 2. Activities and Activity Measures Supporting direct labor (direct labor hours) Product sustaining (number of products) Total manufacturing overhead cost Estimated Overhead Cost $ 797,500 650,000 $2,200,000 Expected Activity 35,000 75,000 110,000 112 Xactive Pathbreaker Total Batch setups (setups) 400 680,000 250 150 72,500 NA NA Other Compute the product margins for the Xactive and the Pathbreaker NA products under the activity-based costing system. 3. Prepare a quantitative comparison of the traditional and activitybased cost assignments. Explain why the traditional and activity-based cost assignments differ. Q2: Super Sales Company is the exclusive distributor for the revolutionary bookbag. The product sells for $60 per unit and has a CM ratio of 40%. The company's fixed expenses are $360,000 per year. The company plans to sell 17,000 bookbag this year. Required: 1. What are the variable expenses per unit? 2. Using the equation method: a. What is the break-even point in units and in sales dollars? b. What sales level in units and in sales dollars is required to earn and annual profit of $90,000? c. Assume that through negotiation with the manufacturer the Super Sales Company is able to reduce its variable expenses by $3 per unit. What is the company's new break- even point in units and in sales dollars? 3. Repeat (2) above using the formula methodStep by Step Solution
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