Smoky Mountain Corporation makes two types of hiking boots-Xtreme and Pathfinder. Data concerning these two product lines appear below Selling price per unit Direct materials per unit Xtreme $140.00 $72.00 Pathfinder $99.00 $ 53.00 $12.00 Direct labor per unit Direct labor-hours per unit Estimated annual production and sales $ 24.00 20,000 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 $ 1,100,000 120,000 DLHS Required: 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 idle capacity costs): Activities and (Activity Measures) Supporting direct labor (direct labor-hours) Estimated Overhead Cost $781,600 Expected Activity Pathfinder 40,000 495,000 200 602,400 Batch setups (setups) Product sustaining (number of products) Total manufacturing overhead cost $ 1,990,000 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 Required: 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 idle capacity costs) Estimated Overhead Cost Expected Activity 40,000 200 Activities and (Activity Measures) Supporting direct labor (direct labor-hours) Batch setups (setups) Product sustaining (number of products) Other $ 783,600 495,000 Total manufacturing overhead cost $1,900,000 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. Required 1 Required 2 Required 3 Compute the product margins for Xtreme and Pathfinder under the company's traditional costing system Note: Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount Product margin Xtreme $ Required 2 > Required: 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 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 Estinated Overhead Cost $783,600 Expected Activity Pathfinder Total 40,000 495,000 100 602,400 1 1 2 99,000 NA $ 1,900,000 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. Required 1 Required 2 Required 3 Compute the product margins for Xtreme and Pathfinder under the activity-based costing system. Note: Negative product margins should be indicated by a minus sign. Round your intermediate calculations to 2 decimal places. Product margin Xtreme Pathfinder Total $

Smoky Mountain Corporation makes two types of hiking boots-Xtreme and Pathfinder. Data concerning these two product lines appear below Selling price per unit Direct materials per unit Xtreme $140.00 $72.00 Pathfinder $99.00 $ 53.00 $12.00 Direct labor per unit Direct labor-hours per unit Estimated annual production and sales $ 24.00 20,000 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 $ 1,100,000 120,000 DLHS Required: 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 idle capacity costs): Activities and (Activity Measures) Supporting direct labor (direct labor-hours) Estimated Overhead Cost $781,600 Expected Activity Pathfinder 40,000 495,000 200 602,400 Batch setups (setups) Product sustaining (number of products) Total manufacturing overhead cost $ 1,990,000 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 Required: 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 idle capacity costs) Estimated Overhead Cost Expected Activity 40,000 200 Activities and (Activity Measures) Supporting direct labor (direct labor-hours) Batch setups (setups) Product sustaining (number of products) Other $ 783,600 495,000 Total manufacturing overhead cost $1,900,000 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. Required 1 Required 2 Required 3 Compute the product margins for Xtreme and Pathfinder under the company's traditional costing system Note: Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount Product margin Xtreme $ Required 2 > Required: 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 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 Estinated Overhead Cost $783,600 Expected Activity Pathfinder Total 40,000 495,000 100 602,400 1 1 2 99,000 NA $ 1,900,000 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. Required 1 Required 2 Required 3 Compute the product margins for Xtreme and Pathfinder under the activity-based costing system. Note: Negative product margins should be indicated by a minus sign. Round your intermediate calculations to 2 decimal places. Product margin Xtreme Pathfinder Total $

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 5PB: Wrappers Tape makes two products: Simple and Removable. It estimates it will produce 369,991 units...

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