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 $ 118.00 $ 84.00

Direct materials per unit $ 65.00 $ 52.00

Direct labor per unit $ 13.50 $ 9.00

Direct labor-hours per unit 1.5 DLHs 1.0 DLHs

Estimated annual production and sales 28,000 units 65,000 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 $ 1,819,000

Estimated total direct labor-hours 107,000 DLHs

Required:

1. Compute the product margins for the Xtreme and the Pathfinder products under the companys traditional costing system. (Do not round your intermediate calculations.)

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 Activity

Activities and Activity Measures Overhead Cost Xtreme Pathfinder Total

Supporting direct labor (direct labor-hours) $ 588,500 42,000 65,000 107,000

Batch setups (setups) 690,000 390 300 690

Product sustaining (number of products) 500,000 1 1 2

Other 40,500 NA NA NA

Total manufacturing overhead cost $ 1,819,000

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.)

iPad? 9:18 PM 69% Smoky Mountain Corporation makes two types of hiking boots Xtreme and the Pathfinder. Data concerning these two product lines appear Selling price per unit Direct materials per unit Direct labor per unit Direct labon-hours per unt Estimated annual production and sale 118 00 5 65.00 S 13.50 S 84.00 5 52.00 5 9.00 65.000 units The company has a traditional oosting system in which manufacturing overhead is applied to units based on direct labor-hours Data concerning manufacturing overhead and direct labor-hours for te upcoming year appear below $1819 000 Required 1 . Compute the product margns for the rerne and the Pathfinder products under the company's tradional costing system (De not round Product mangin 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 ide capacity costs) Supporting direct labor (direct labo-hours) Batch setups (setups) Product sustaining number of products) Other 588.500 42,000 Compute the product margins for the Xtreme and the Pathfinder products under the acivity-based costing system. (Negative product margins should be indicated with a minus sign. Round your intermediate callculations to 2 decimal places Product mangin Round your "Percentage" answer to 1 decimal place, (ie..1234 should be entered as 12.3) Traditional Cost System