Problem 7-17 (Algo) Comparing Traditional and Activity-Based Product Margins (L07-1, LO7-3, L07-4. LO7-5) Smoky Mountain Corporation makes two types of hiking boots the Xtreme and the Pathfinder Data concerning these two product lines appear below Baking price per unit Direct materiale per unit Direct labor per unit Direct labor-hours per unit Estimated annual production and malea Xtreme $120.00 $63.30 $ 17.00 1. Du 22,000 units Pathfinder $2.00 $ 52.00 10.00 1.0 DIN 76,000 unita 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 DE 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 Expected Activity Activities and Activity Messuren Overhead Coat Xtreme Pathfinder Total Supporting direct labor (direct labor-hours) s 703,080 37.400 76,000 113,400 Batch setups (setups) 480,000 180 400 Product mataining number of products) 700,000 1 2 Other 44,720 Total manufacturing overhead coat $1,927, 200 220 1 NA NA Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system 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 Product margin 0 teque Required 2 > 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 activity based costing system. (Round your intermediate calculations to 2 decimal places.) Xtreme Pathfinder Total Product margin 0 Required 1 Required 3 > 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.) Total Xtreme % of Amount Total Amount Pathfinder % of Amount Total Amount Amount Traditional Cost System % % % $ Total cost assigned to products 0 $ 0 $ Total Xtreme % of Amount Total Amount Pathfinder % of Amount Total Amou Amount Activity-Based Costing System Direct costs % Indirect costs % S % % $ 0 $ 0 0 $ Total cost assigned to products Costs not assigned to products: $ 0 Total cost
