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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
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 $ 63.40 $ 14.40 Xtreme Pathfinder $ 124.00 $ 88.00 $ 53.00 8.00 1.8 DLHS 23,000 units 1.0 DLHS 70,000 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 Estimated total direct labor-hours $ 2,005,200 111,400 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 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 Expected Activity Xtreme Pathfinder Total $ 712,960 41,400 70,000 111,400 504,000 230 190 420 740,000 1 1 2 48,240 NA NA NA $ 2,005,200 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. 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.) Traditional Cost System Xtreme Pathfinder Total % of % of Amount Total Amount Amount Total Amount Amount Direct materials % % Direct labor % % Manufacturing overhead % % Total cost assigned to products $ 0 $ 0 $ 0 Xtreme Pathfinder Total % of % of Amount Total Amount Amount Total Amount Amount Activity-Based Costing System Direct costs: Indirect costs: % % % % % % Total cost assigned to products Costs not assigned to products: $ 0 S 0 $ 0 Total cost $ 0 "
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