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i need help with this question . my answe for pathfinder is incorrect can you please help me Problem 7-17 (Algo) Comparing Traditional and Activity-Based
i need help with this question . my answe for pathfinder is incorrect can you please help me
Problem 7-17 (Algo) Comparing Traditional and Activity-Based Product Margins (L07-1, LO7-3, LO7-4, LO7-5) 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 $ 120.00 $ 87.00 Direct materials per unit $ 63.60 $ 55.00 Direct labor per unit $ 12.00 $ 10.00 Direct labor-hours per unit 1.2 DLHS 1.0 DLHO Estimated annual production and sales 25,000 units 72,000 units The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours IData concerning manufacturing overhead and direct labor-hours for the upcoming year appear below: Estimated total manufacturing overhead $ 2,040,000 Estimated total direct labor-hours 102,000 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 copacity costs): hotivities and activity Measures supporting direct labor direct labor-hours) Date setup tups) Product sustaining number of products) Other Total manufacturing overhead coat Batimated Overhead cost $622,200 644,000 700.000 23,000 $ 2,040,000 Expected Activity Xtreme Pathfinder Total 30,000 72,000 102,000 250 210 460 1 1 2 NA NA NA Requirea: 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 Esbected Activity Activities and Activity Measures Overhead Cost XtremePathfinder Total Supporting direct labor (direct labor-hours) $ 622,200 30,000 72,000 102,000 Batch setups (netups) 644,000 250 210 Product sustaining (number of products) 700,000 1 2 Other 73,800 NA Total manufacturing overhead cost $ 2,040,000 460 2 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. Answer is complete but not entirely correct. 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.) Product margin Xtreme 227,000 Pathfinder $ 300,800 Total 527,800 Step by Step Solution
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