question number 17

1300 under the 50 dhe Required: 1. Using Exhibit 7-13 as a guide, compute the product margins for the B300 and T300 company's traditional costing system. margins for B300 and 7500 und 2 Using Exhibit 7-11 as a guide, compute the product mars activity-based costing system. Using Exhibit 7-14 as a guide, prepare a quantitative comparison of the traditional aty-based cost assignments. Explain why the traditional and activity-based costas differ. gional and actos cost assignments 7-1, LO7-3, LO PROBLEM 7-17 Comparing Traditional and Activity-Based Product Margins the Pathfinder LO7-5 Smoky Mountain Corporation makes two types of hiking boots--the Xtreme and the Path Data concerning these two product lines appear below: Xtreme Pathfinder Selling price per unit ...... Direct materials per unit. Direct labor per unit.. Direct labor-hours per unit ... Estimated annual production and sales ....... $140.00 $72.00 $24.00 2.0 DLHS 20,000 units $99.00 $53.00 $12.00 1.0 DLHS 80,000 units The company has a traditional costing system in which manufacturing overhead is applied to based on direct labor hours. Data concerning manufacturing overhead and direct labor hours the upcoming year appear below: Estimated total manufacturing overhead .......... Estimated total direct labor-hours. $1,980,000 120,000 DLHS Required: 1. Using Exhibit 7-13 as a guide, compute the product margins for the Xtreme and the Path finder 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 costs and idle capacity costs): Estimated Expected Activity Activities and Activity Measures Overhead Cost Xtreme Pathfinder Total Supporting direct labor (direct labor hours)..... $ 783,600 40,000 80,000 120,00 Batch setups (setups) 495.000 200 100 Product sustaining (number of products) ....... 602,400 Other 99,000 NA NA Total manufacturing overhead cost ............ $1.980,000 300 me and the Path Using Exhibit 7-11 as a guide, compute the product margins for the Xtreme and finder products under the activity-based costing system. 3. Using Exhibit 7-14 as a guide, prepare a quantitative comparison of the traditional and based cost assignments. Explain why the traditional and activity-based cost asse differ. ional and activity assignments PROBLEM 7-18 Activity-Based Costing and Bidding on Jobs L07-2, L07-3, L07-4 Mercer Asbestos Removal Company removes potentially toxic asbestos insulation products from buildings. There has been a lone tion and related