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Smoky Mountain Corporation makes two types of hiking boots-Xtreme and Pathfinder. Data concerning these two product lines appear below: Xtreme Selling price per unit $ 120.00 Pathfinder $ 92.00 Direct materials per unit $ 63.50 $ 54.00 Direct labor per unit $ 13.50 Direct labor-hours per unit Estimated annual production and sales 1.5 DLHS 24,000 units $ 9.00 1.0 DLH 71,000 units. The company has a traditional costing system that applies manufacturing overhead 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 Required: $ 2,033,000 107,000 DLHS 1. Compute the product margins for Xtreme and Pathfinder 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 idl 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 Expected Activity Xtreme Pathfinder Total 36,000 71,000 107,000 240 200 440 1 1 2 47,600 NA NA NA $ 2,033,000 $ 663,400 572,000 750,000 Compute the product margins for Xtreme and Pathfinder 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.

Smoky Mountain Corporation makes two types of hiking boots-Xtreme and Pathfinder. Data concerning these two product lines appear below: Xtreme Selling price per unit $ 120.00 Pathfinder $ 92.00 Direct materials per unit $ 63.50 $ 54.00 Direct labor per unit $ 13.50 Direct labor-hours per unit Estimated annual production and sales 1.5 DLHS 24,000 units $ 9.00 1.0 DLH 71,000 units. The company has a traditional costing system that applies manufacturing overhead 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 Required: $ 2,033,000 107,000 DLHS 1. Compute the product margins for Xtreme and Pathfinder 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 idl 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 Expected Activity Xtreme Pathfinder Total 36,000 71,000 107,000 240 200 440 1 1 2 47,600 NA NA NA $ 2,033,000 $ 663,400 572,000 750,000 Compute the product margins for Xtreme and Pathfinder 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.

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter11: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 16E
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Smoky Mountain Corporation makes two types of hiking boots-Xtreme and Pathfinder. Data concerning these two product lines appear below: Xtreme Selling price per unit $ 120.00 Pathfinder $ 92.00 Direct materials per unit $ 63.50 $ 54.00 Direct labor per unit $ 13.50 Direct labor-hours per unit Estimated annual production and sales 1.5 DLHS 24,000 units $ 9.00 1.0 DLH 71,000 units. The company has a traditional costing system that applies manufacturing overhead 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 Required: $ 2,033,000 107,000 DLHS 1. Compute the product margins for Xtreme and Pathfinder 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 idl 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 Expected Activity Xtreme Pathfinder Total 36,000 71,000 107,000 240 200 440 1 1 2 47,600 NA NA NA $ 2,033,000 $ 663,400 572,000 750,000 Compute the product margins for Xtreme and Pathfinder 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.
Transcribed Image Text:Smoky Mountain Corporation makes two types of hiking boots-Xtreme and Pathfinder. Data concerning these two product lines appear below: Xtreme Selling price per unit $ 120.00 Pathfinder $ 92.00 Direct materials per unit $ 63.50 $ 54.00 Direct labor per unit $ 13.50 Direct labor-hours per unit Estimated annual production and sales 1.5 DLHS 24,000 units $ 9.00 1.0 DLH 71,000 units. The company has a traditional costing system that applies manufacturing overhead 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 Required: $ 2,033,000 107,000 DLHS 1. Compute the product margins for Xtreme and Pathfinder 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 idl 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 Expected Activity Xtreme Pathfinder Total 36,000 71,000 107,000 240 200 440 1 1 2 47,600 NA NA NA $ 2,033,000 $ 663,400 572,000 750,000 Compute the product margins for Xtreme and Pathfinder 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.
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