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Please find the right answers to the incorrect ones. Smoky Mountain Corporation makes two types of hiking boots-the Xtreme and the Pathfinder. Data concerning these
Please find the right answers to the incorrect ones.
Smoky Mountain Corporation makes two types of hiking boots-the Xtreme and the Pathfinder. Data 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 $ 124.00 $ 63.40 $ 14.40 1.8 DLHS 23,000 units Pathfinder $ 88.00 $ 53.00 $ 8.00 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 $ 2,605,200 111,400 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 $ 712,960 504,000 740,000 48,240 $ 2,005, 200 Expected Activity Xtreme Pathfinder Total 41,400 70,000 111,400 230 190 420 1 1 2 NA 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. 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 Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations to 2 decimal places.) Total Xtreme % of Total Amount Pathfinder % of Total Amount Amount Amount Amount Traditional Cost System Direct materials Direct labor Manufacturing overhead Total cost assigned to products $ 1,458,200 331,200 745.200 $2,534,800 57.5 X % 13.1 % % 29.4 % % $ 3.710,000 560.000 1,260.000 $ 5,530.000 67.1 % % 10.1 X % 22.8 X % 5.168.200 891,200 2,005,200 $ 8,084.600 Total Xtreme % of Total Amount Pathfinder - % of Total Amount Amount Amount Amount Activity-Based Costing System Direct costs: Direct materials $ 1,458,200 331,200 54.0 X 12.3 % % 3.710.000 560.000 89.8 % % 10.5 X % 5168.200 891,200 Direct labor Indirect costs: Supporting direct labor 9.8 x % x % Batch setups 96 284.960 278,000 370.000 $ 2,700.360 10.2 x 13.7 X 448.000 228.000 370.000 $ 5,316,000 X X % % 712.960 504.000 740.000 $ 8,016,360 0 Product sustaining Total cost assigned to products Costs not assigned to products: Other 48.240 $ 8,084,800 Total costStep by Step Solution
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