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 Pathfinder $ 115.00 $ 85.00 $ 63.90 $ 51.00 Direct labor per unit Direct labor-hours per unit Estimated annual production and sales $ 12.00 1.2 DLHS 28,000 units $ 10.00 1.0 DLH 75,000 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: $ 2,063,400 108,600 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 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 520,000 Estimated Overhead Cost $ 673,320 Expected Activity Xtreme Pathfinder Total 33,600 75,000 108,600 280 240 790,000 1 1 520 2 80,080 NA NA NA $ 2,063,400 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 Pathfinder Total $ 0
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 Pathfinder $ 115.00 $ 85.00 $ 63.90 $ 51.00 Direct labor per unit Direct labor-hours per unit Estimated annual production and sales $ 12.00 1.2 DLHS 28,000 units $ 10.00 1.0 DLH 75,000 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: $ 2,063,400 108,600 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 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 520,000 Estimated Overhead Cost $ 673,320 Expected Activity Xtreme Pathfinder Total 33,600 75,000 108,600 280 240 790,000 1 1 520 2 80,080 NA NA NA $ 2,063,400 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 Pathfinder Total $ 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text: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
Pathfinder
$ 115.00
$ 85.00
$ 63.90
$ 51.00
Direct labor per unit
Direct labor-hours per unit
Estimated annual production and sales
$ 12.00
1.2 DLHS
28,000 units
$ 10.00
1.0 DLH
75,000 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:
$ 2,063,400
108,600 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 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
520,000
Estimated
Overhead Cost
$ 673,320
Expected Activity
Xtreme
Pathfinder
Total
33,600
75,000
108,600
280
240
790,000
1
1
520
2
80,080
NA
NA
NA
$ 2,063,400
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
Pathfinder
Total
$
0
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