Smoky Mountain Corporation makes two types of hiking boots-the Xtreme and the Pathfinder. Data concerning these two prod

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Smoky Mountain Corporation Makes Two Types Of Hiking Boots The Xtreme And The Pathfinder Data Concerning These Two Prod 1 (59.35 KiB) Viewed 54 times

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 $ 65.20 $ 11.20 1.4 DLHS 30,eee units Pathfinder $ 87.00 $ 51.00 $ 8.00 1. DLHS 65,eee 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 $ 2,033, 080 107,680 DLHS 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 Measures Supporting direct labor (direct labor-hours) Batch setups (setups) Product sustaining (number of products) Other Total manufacturing overhead cost Estimated Overhead Cost $ 631,380 876,880 468,880 65,780 $ 2,633,880 Expected Activity Xtreme Pathfinder Total 42,00 65,000 107,000 410 320 730 1 1 2 NA NA 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 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 Amount 96 %6 Traditional Cost System Direct labor Batch setups Product sustaining Total cost assigned to products % %6 %6 %6 s 0 S 0 $ 0 Xtreme Pathfinder Total % of % of Amount Total Amount Amount Total Amount Amount Activity-Based Costing System Direct costs: %6 %6 %6 %6 Indirect costs: %6 %6 %6 %6 % %6 s $ 0 Total cost assigned to products Costs not assigned to products: MI Total cost $ 0 < Required 2 Required 3