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 Xtreme $ 123.00 Pathfinder $ 86.00 Direct materials per unit $ 63.80 $ 50.00 Direct labor per unit $ 10.80 $ 9.00 Direct labor-hours per unit Estimated annual production and sales 1.2 DLs 27,000 units 1.0 DLB 74,000 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: $ 2,340,800 106,400 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) Estimated Overhead Cost Expected Activity Xtreme Pathfinder Total 32,400 106,400 270 1 230 1 500 2 $ 691,600 900,000 700,000 74,000 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 Xtreme $ 123.00 Pathfinder $ 86.00 Direct materials per unit $ 63.80 $ 50.00 Direct labor per unit $ 10.80 $ 9.00 Direct labor-hours per unit Estimated annual production and sales 1.2 DLs 27,000 units 1.0 DLB 74,000 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: $ 2,340,800 106,400 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) Estimated Overhead Cost Expected Activity Xtreme Pathfinder Total 32,400 106,400 270 1 230 1 500 2 $ 691,600 900,000 700,000 74,000