Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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
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 Xtreme $ 130.00 $ 11.20 Pathfinder $91.00 $50.00 $8.00 $ 64.30 Direct labor per unit Direct labor-hours per unit Estimated annual production and sales 1.4 DLHS 21,000 units 1.0 DLHS 72,000 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 Required: $ 2,230,800 101,400 DLH 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 Total Banufacturing overhead cost Estinated Overhead Cost $699,660 Xtreme Expected Activity Pathfinder Total 29,400 72,000 101,400 660,000 320 230 550 780,000 3 1 2 91,140 NA NA NA $ 2,230,800 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. Answer is not complete. 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.) Total Xtreme Pathfinder Product margin $ (16,380) $ 799,200. 782 820 Required 1 Required 2 > Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Retired 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 $ (18) 160 (2) Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2. 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,) Traditional Cost System Supporting direct labor i Pathfinder % of Total Amount Total Amount Xtreme Amount % of Total Amount Amount 202,860 $ 496 800 $ 699,660 Total cost assigned to products 202,060 $ 496,800 S 699,660
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started