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The numbers are correct but the percentages arent rounded right. They should be rounded to the first decimal place. Problem 7-17 (Algo) Comparing Traditional and
The numbers are correct but the percentages arent rounded right. They should be rounded to the first decimal place.
Problem 7-17 (Algo) Comparing Traditional and Activity-Based Product Margins (L07-1, LO7-3, L07-4, LO7-5) 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 $121.00 $ 63.70 $ 8.80 1.1 L 26,000 unita Pathfinder $ 91.00 $ 56.00 $ 8.00 1.0 DL 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. Estimated total manufacturing overhead Estimated total direct labor-hours $ 2,133,600 101,600 DE 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): Activities and Activity Moses Supporting direct labor direct labor-hours) Batch setupa (setup) Product sustaining number of products) Other Total manufacturing overhead cont Tatimated Expected Activity Overhead coat Xtreme Pathfinder Total $ 629,920 20,600 73,000 101,600 768.000 260 220 480 710,000 1 1 2 25,630 NA NA NA $2,13),600 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 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) 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.) Xtreme Pathfinder Total % of % of Amount Total Amount Amount Total Amount Amount Traditional Cost System Direct materials $1,655,200 67.0 %$ 4,088,000 66.0 %$ 5,744,200 Direct labor 228,800 9.01% 584,000 9.01% 812,800 Manufacturing overhead 600,600 24.01% 1,533,000 25.01% 2,133,600 Total cost assigned to products $ 2.485,600 $ 6,205,000 $ 8,690,600 Xtreme Pathfinder Total % of Amount Total Amount % of Total Amount Amount Amount $ 1,656,200 228,800 58.01%$ 4,088,000 8.01% 584,000 70.0 %$ 5,744,200 10.01% 812,800 Activity-Based Costing System Direct costs Direct materials Direct labor Indirect costs: Supporting direct labor Batch setups Product sustaining Total cost assigned to products Costs not assigned to products Other Total cost 177,320 416,000 355,000 $ 2.833,320 6.01% 15.0% 13.01% 452,600 352,000 355,000 $ 5,831,600 8.01% 6,01% 6.01% 629,920 768,000 710,000 $ 8,664,920 25.680 $ 8.690.600 Step by Step Solution
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