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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

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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 $ 121.00 $64.90 $ 11.20 1.4 DLHS 27,000 units Pathfinder $85.00 $ 51.00 $ 3.00 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 $ 2,156,000 107,300 OLHA 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 Estimated Overhead cost $ 700, 700 237,00 640,000 70300 Expected Activity Xtreme Pathfinder Total 37,000 70,000 107,800 380 200 670 1 1 2 NA NA MA 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 $ 700,700 737,000 640,000 78,300 $ 2,156,000 Expected Activity Xtreme Pathfinder Total 37,800 70,000 107,880 380 290 670 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. 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 Requited Required 2 >

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