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 $ 115.00 $ 65.50 $ 13.60 1.7 DLHS 33,000 units Pathfinder $ 84.00 $ 54.00 $ 8.00 1.0 DLN 61,000 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 $1,756,500 117,100 Ls 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 4s traditional costing system with an activity-based costing system that would assign its manufacturing overhead to the following our activity cost pools (the other cost pool includes organization-sustaining costs and Idle capacity costs); Activities and activity Measures Estimated Overhead Cost Expected Activity Xt.com Pathfinder Total 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) Batoh setups (setups) Product sustaining (number of products) Other Total manufacturing overhead cost Estimated Expected Activity Overhead Cost Xtreme Pathfinder Total $ 526,950 56,100 61,000 117.100 790,000 440 350 790 400.000 1 1 2 39,550 NA NA NA $1,756,500 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 tree 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.) Amount Total Amount Amount Total Amount Amount Traditional Cost System % % RI Total cost assigned to products $ 0 $ 0 $ 0 Pathfinder Total Xtreme % of Amount Total Amount % of Amount Total Amount Amount Activity-Based Costing System Direct costs: + % % Indirect costs: % % ** % $ 0 $ $ 0 Total cost assigned to products Costs not assigned to products: Total cost $
