Answered step by step
Verified Expert Solution
Link Copied!

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

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
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 Direct labor-hours per unit Estimated annual production and sales Xtreme $ 120.ee $64.88 $ 13.00 1.3 DLHS 26,000 units Pathfinder $ 80.00 $ 50.00 $ 10.00 1.2 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 $ 1,904,400 185,800 DLH5 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) Estimated Expected Activity ACEIVEies and Activity Measures Overhead Cost xtrem Pathfinder Total Supporting direct Labor (direct labor hours) S81,900 33,300 72,000 105,000 Batch setups (setups) 650,000 370 280 650 Product sustainine (number of products) 600,000 1 1 Other 72,500 NA Total manufacturing overhead cost $ 1,994,400 2 NA 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 Pathfinder Total Product margin Renud Required 2 > 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 Pathfinder Total Product margin $ 0 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.) Total Xtreme % of Amount Total Amount Pathfinder % of Amount Total Amount Traditional Cost System Amount % 95 96 Total cost assigned to products $ $ 0 $ 0 Pathfinder Total Xtreme % of Amount Total Amount Amount % of Total Amount Anun Total cost assigned to products $ 0 $ 0 $ Xtreme Pathfinder Total % of % of Amount Total Amount Amount Total Amount Amount Activity-Based Costing System Direct costs: % 96 96 %% Indirect costs: % RRR % % $ 0 $ 0 $ 0 Total cost assigned to products Costs not assigned to products: Total cost $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing A Risk Based-Approach

Authors: Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

11th Edition

1337619455, 1337619450, 9781337670203 , 978-1337619455

More Books

Students also viewed these Accounting questions