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 Xtrene Pathfinder $ 120.00 $ 80.00 $ 50.00 $10.00 Direct materials per unit Direct labor per unit Direct labor-hours per unit Estimated annual production and sales $ 64.80 $13.00 1.3 DLHS 26,000 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 $ 1,904,400 105,800 DLB 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 Total manufacturing overhead cost Estimated Overhead Coat Expected Activity Xtreme Pathfinder Total 33,800 72,000 105,800 370 280 650 1 1 2 NA NA NA $ 581,900 650,000 600,000 72,500 $ 1,904,400 Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system. Xtreme % of Pathfinder % of Total Amount Amount Total Amount Amount Total Amount Traditional Cost System Direct materials $ 1,684,800 3.0 Direct labor 338,000 Manufacturing overhead 608,400 Total cost assigned to products $ 2,631,200 $ 0 $ 0 Amount Xtreme % of Total Amount Amount + Pathfinder % of Total Amount Total Amount Activity-Based Costing System Direct costs: Direct materials Direct labor Indirect costs: $ 1,684,800 338,000 Supporting direct labor 185,900 Batch setups 370,000 Product sustaining 300,000 Total cost assigned to products $ 2,878,700 $ 0 $ 0 Costs not assigned to products: < Prev 3 of 3 Next 2.878.700E