Answered step by step
Verified Expert Solution
Link Copied!
Question
1 Approved Answer

Rocky Mountain Corporation makes two types of hiking boots-Xactive and the Pathbreaker. Data concerning these two product lines appear below Selling price per unit Direct

image text in transcribed
image text in transcribed
Rocky Mountain Corporation makes two types of hiking boots-Xactive and the Pathbreaker. 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 Xactive $120.00 63.60 s 12.00 Pathbreaker $ 87.00 $ 55.00 S 10.00 1200 DHS20 25,000 units 1.0 DLHs 72.000 units The company has a traditional costing system in which manufacturnng 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$2,040,000 Estimated total direct labor-hours 102.000 DLHs Required t. compute the product margins for the Xacive and the Pathbreaker products under the company's traditional costing system. (Loss amounts should be indicated with a minus sign. Omit the "$" sign in your rosponse.) vO Pathbreaker Total Product margin 2. The company is considering replacing its traditional costing system with an activity-based costing system that would assign its manufacturing overhoad 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 Supporting direct labor (direct labor-hours)S Batch setups (setups) Product sustaining tnumber of products) Other Cost Xactive Pathbreaker Total 30.000 72.000 102.000 460 622.200 644,000 700,000 73,800 250 210 NA NA Total manufacturing overhead cost S 2.040.000 Compute the product margins for the Xactive and the Pathbreaker products under the activity-based costing system. (Loss amounts should be indicated with a minus sign. Round your intermediate calculations to 2 decimal places and final answers to the nearest dollar amount. Omit the "" sign in your response.) Xactive Pathbreaker Total Product margin 3. Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Do not round intermediate calculations. Round your percentage answers to one decimal place and other answers to the nearest dollar amount. Omit the "S" & "%" signs in your response.) Pathbreaker Total %of Total Amount %of Total Amount Amount Click to select Click to select) Click to select) Total cost assigned to products Activity Based Costing System Direct costs (Click to select) Click to select) Click to select @cktoselect) Indirect costs Click to solect Total cost assigned to products Costs not ass Click to select) Total cost

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image
Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Tools for business decision making

Authors: kimmel, weygandt, kieso

4th Edition

978-0470117262, 9780470534786, 470117265, 470534788, 978-0470095461

More Books

Students explore these related Accounting questions