Smoky Mountain Corporation makes two types of hiking bootsXtreme and the Pathfinder. Data concerning these two product lines appear below:

	Xtreme			Pathfinder
Selling price per unit	$	140.00		$	99.00
Direct materials per unit	$	72.00		$	53.00
Direct labor per unit	$	24.00		$	12.00
Direct labor-hours per unit		2.0	DLHs		1.0	DLHs
Estimated annual production and sales		20,000	units		80,000	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	$1,980,000
Estimated total direct labor-hours	120,000 DLHs

Required:
1.	Compute the product margins for the Xtreme and the Pathfinder products under the companys traditional costing system. (Round your intermediate calculations to 2 decimal places.)

	Xtreme	Pathfinder	Total
Product margin			$0

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
Activities and Activity Measures	Overhead Cost		Xtreme	Pathfinder	Total
Supporting direct labor (direct labor-hours)	$	783,600	40,000	80,000	120,000
Batch setups (setups)		495,000	200	100	300
Product sustaining (number of products)		602,400	1	1	2
Other		99,000	NA	NA	NA
Total manufacturing overhead cost	$	1,980,000

2. Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system. (Negative product margins should be indicated with a minus sign. Round your intermediate calculations to 2 decimal places.)

	Xtreme	Pathfinder	Total
Product margin			$0

Advanced Products Corporation has supplied the following data from its activity-based costing system:

Overhead Costs
Wages and salaries	$	300,000
Other overhead costs		100,000
Total overhead costs	$	400,000

Activity Cost Pool	Activity Measure	Total Activity
Direct labor support	Number of direct labor-hours	20,000	DLHs
Order processing	Number of customer orders	400	orders
Customer support	Number of customers	200	customers
Other	This is an organization-sustaining activity	Not applicable

	Distribution of Resource Consumption Across Activities
	Direct Labor Support		Order Processing		Customer Support		Other		Total
Wages and salaries	40	%	30	%	20	%	10	%	100	%
Other overhead costs	30	%	10	%	20	%	40	%	100	%

During the year, Advanced Products completed one order for a new customer, Shenzhen Enterprises. This customer did not order any other products during the year. Data concerning that order follow:

Data Concerning the Shenzhen Enterprises Order
Units ordered		10	units
Direct labor-hours		2	DLHs per unit
Selling price	$	300	per unit
Direct materials	$	180	per unit
Direct labor	$	50	per unit

Required:
1.	Prepare a report showing the first-stage allocations of overhead costs to the activity cost pools.

2.	Compute the activity rates for the activity cost pools. (Round your answers to 2 decimal places.)

3.	Prepare a report showing the overhead costs for the order from Shenzhen Enterprises including customer support costs. (Round your intermediate calculations to 2 decimal places.)

	Direct Labor Support	Order Processing	Customer Support	Total
Activity	20 DLHS	1 order	1 customer
Wages and salaries				$0
Other overhead costs				0
Total cost