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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: Pathfinder Xtreme 121.00 $
Smoky Mountain Corporation makes two types of hiking boots-the Xtreme and the Pathfinder. Data concerning these two product lines appear below: Pathfinder Xtreme 121.00 $ 63.70 Selling price per unit Direct materials per unit Direct labor per unit Direct labor-hours per unit Estimated annual production and sales $ 91.00 $ 56.00 $ 8.80 S 8.00 1.1 DLHS 26,000 units 1.0 DLHS 73,000 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: $ 2,133,600 101,600 DLHS Estimated total manufacturing overhead Estimated total direct labor-hours Required: .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 and Activity Measures st over 920 al Xtre er 28 600 73,0 101 Suppor tg uns 768,000 260 220 480 Product sustain ing (number of products) 710,000 25,680 1 1 Other NA NA NA $ 2,133,600 Total manufacturing overhead cost 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 3 Required 2
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