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 Xtreme $132.00 Pathfinder $ 94.00 $ 64.60 $ 53.00 $ 9.60 $ 8.00 Direct labor-hours per unit Estimated annual production and sales 1.2 DLHS 24,000 units 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 Required: $2,470,000 98,800 DLHS 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 Cost $ 642,200 Expected Activity Xtreme Pathfinder Total 20,000 70,000 350. 260 1 1 98,800 610 2 72,800 $2,470,000 NA NA NA 915,000 840,000 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 Product margin Pathfinder Total Required 1 Required 2 > 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 activity-based costing system. (Round your intermediate calculations to 2 decimal places.) Xtreme Product margin Pathfinder Total < Required 1 Required 3 > Required 1 Required 2 Required 3 Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations to 2 dec places and "Percentage" answers to 1 decimal place.) Traditional Cost System Xtreme Pathfinder Total % of % of Amount Total Amount Amount Total Amount Amount Direct materials $ Direct labor Manufacturing overhead 1,550,400 230,400 720,000 29.5 % $ 3,710,000 29.2 % 70.5 % $ 5,260,400 560,000 70.9 % 29.2 % 1,750,000 70.9 % 790,400 2,470,000 Total cost assigned to products $ 2,500,800 $ 6,020,000 $ 8,520,800 Xtreme Pathfinder Total % of Amount Total Amount Aliount % of Total Amount Amount Activity-Based Costing System Direct costs: Direct materials Direct labor Indirect costs: Supporting direct labor Batch setups Product sustaining $ 1,550,400 29.5 % $ 3,710,000 70.5 % $ 5,260,400 230,400 29.2 % 560,000 70.9 % 790,400 187,200 29.2 % 455,000 70.9 % 642,200 525,000 57.4 % 390,000 42.6 % 915,000 420,000 50.0 % 420,000 50.0 % 840,000 Total cost assigned to products $ 2,913,000 $ 5,535,000 $ 8,448,000 Costs not assigned to products: Other Total cost 72,800 $ 8,520,800 < Prev 4 of 5 Next >