Smoky Mountain Corporation makes two types of hiking boots-the Xtreme and the Pathfinder. Data concerning these...
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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 $ 64.10 Xtreme Pathfinder $ 120.00 $ 90.00 $ 53.00 $ 13.50 $ 9.00 1.5 DLHS 30,000 units Direct labor per unit Direct labor-hours per unit Estimated annual production and sales 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 $ 2,300,000 115,000 DLHS 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 $ 977,500 612,000 700,000 Estimated Overhead Cost Expected Activity Xtreme Pathfinder Total 45,000 70,000 115,000 300 210 510 1 1 10,500 NA NA NA $ 2,300,000 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. Note: Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount. capacity costs): Activities and (Activity Measures) Supporting direct labor (direct labor-hours) Batch setups (setups) Product sustaining (number of products) Other Estimated Expected Activity Overhead Cost Xtreme Pathfinder 45,000 70,000 Total 115,000 300 210 510 1 1 10,500 NA NA NA $ 977,500 612,000 700,000 Total manufacturing overhead cost $ 2,300,000 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. Note: Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount. Xtreme Pathfinder Total Product margin Activities and (Activity Measures) Supporting direct labor (direct labor-hours) Batch setups (setups) Product sustaining (number of products) Other $ 977,500 612,000 700,000 Total manufacturing overhead cost Estimated Overhead Cost Expected Activity Xtreme 45,000 Pathfinder 70,000 Total 115,000 300 210 510 1 1 2 10,500 NA NA NA $ 2,300,000 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 activity-based costing system. Note: Round your intermediate calculations to 2 decimal places. Product margin Xtreme Pathfinder Total < Required 1 Required 3 > S 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. Note: Round your intermediate calculations to 2 decimal places and "Percentage" answers to 1 decimal place. Xtreme % of Total Amount Amount Amount Traditional Cost System Total cost assigned to products Pathfinder % of Total Amount Total Amount Xtreme Pathfinder Amount % of Total Amount % of Total Amount Amount Total Amount Activity-Based Costing System Direct costs: Indirect costs: Total cost assigned to products Costs not assigned to products: Total cost < Required 2 Required 3 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 $ 64.10 Xtreme Pathfinder $ 120.00 $ 90.00 $ 53.00 $ 13.50 $ 9.00 1.5 DLHS 30,000 units Direct labor per unit Direct labor-hours per unit Estimated annual production and sales 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 $ 2,300,000 115,000 DLHS 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 $ 977,500 612,000 700,000 Estimated Overhead Cost Expected Activity Xtreme Pathfinder Total 45,000 70,000 115,000 300 210 510 1 1 10,500 NA NA NA $ 2,300,000 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. Note: Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount. capacity costs): Activities and (Activity Measures) Supporting direct labor (direct labor-hours) Batch setups (setups) Product sustaining (number of products) Other Estimated Expected Activity Overhead Cost Xtreme Pathfinder 45,000 70,000 Total 115,000 300 210 510 1 1 10,500 NA NA NA $ 977,500 612,000 700,000 Total manufacturing overhead cost $ 2,300,000 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. Note: Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount. Xtreme Pathfinder Total Product margin Activities and (Activity Measures) Supporting direct labor (direct labor-hours) Batch setups (setups) Product sustaining (number of products) Other $ 977,500 612,000 700,000 Total manufacturing overhead cost Estimated Overhead Cost Expected Activity Xtreme 45,000 Pathfinder 70,000 Total 115,000 300 210 510 1 1 2 10,500 NA NA NA $ 2,300,000 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 activity-based costing system. Note: Round your intermediate calculations to 2 decimal places. Product margin Xtreme Pathfinder Total < Required 1 Required 3 > S 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. Note: Round your intermediate calculations to 2 decimal places and "Percentage" answers to 1 decimal place. Xtreme % of Total Amount Amount Amount Traditional Cost System Total cost assigned to products Pathfinder % of Total Amount Total Amount Xtreme Pathfinder Amount % of Total Amount % of Total Amount Amount Total Amount Activity-Based Costing System Direct costs: Indirect costs: Total cost assigned to products Costs not assigned to products: Total cost < Required 2 Required 3
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