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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 Direct labor per unit Direct labor-hours per unit Estimated annual production and sales Estimated total manufacturing overhead Estimated total direct labor-hours Xtreme Activities and (Activity Measures) Supporting direct labor (direct labor-hours) $ 140.00 $ 72.00 $ 24.00 2.0 DLHS 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: Complete t $ 1,980,000 120,000 DLHS Pathfinder 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): $99.00 $ 53.00 $ 12.00 1.0 DLH 80,000 units Estimated Overhead Cost $ 783,600 495,000 602,400 99,000 $ 1,980,000 Expected Activity Pathfinder 80,000 100 1 NA Xtreme 40,000 200 1 NA Batch setups (setups) Product sustaining (number of products) Other Total manufacturing overhead cost 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. Total 120,000 300 2 NA

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 Direct labor per unit Direct labor-hours per unit Estimated annual production and sales Estimated total manufacturing overhead Estimated total direct labor-hours Xtreme Activities and (Activity Measures) Supporting direct labor (direct labor-hours) $ 140.00 $ 72.00 $ 24.00 2.0 DLHS 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: Complete t $ 1,980,000 120,000 DLHS Pathfinder 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): $99.00 $ 53.00 $ 12.00 1.0 DLH 80,000 units Estimated Overhead Cost $ 783,600 495,000 602,400 99,000 $ 1,980,000 Expected Activity Pathfinder 80,000 100 1 NA Xtreme 40,000 200 1 NA Batch setups (setups) Product sustaining (number of products) Other Total manufacturing overhead cost 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. Total 120,000 300 2 NA

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 Direct labor per unit Direct labor-hours per unit Estimated annual production and sales Xtreme $ 140.00 $ 72.00 $ 24.00 Activities and (Activity Measures) Supporting direct labor (direct labor-hours) 2.0 DLHS 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 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): $ 1,980,000 120,000 DLHS Pathfinder Estimated Overhead Cost $ 783,600 495,000 602,400 99,000 $ 1,980,000 $99.00 $ 53.00 $ 12.00 1.0 DLH 80,000 units Complete this question by entering your answers in the tabs below. Expected Activity Xtreme Pathfinder 40,000 Total 80,000 120,000 100 1 Batch setups (setups) Product sustaining (number of products) Other Total manufacturing overhead cost 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. 200 1 ΝΑ ΝΑ 300 2 NA
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 Direct labor per unit Direct labor-hours per unit Estimated annual production and sales Xtreme $ 140.00 $ 72.00 $ 24.00 Activities and (Activity Measures) Supporting direct labor (direct labor-hours) 2.0 DLHS 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 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): $ 1,980,000 120,000 DLHS Pathfinder Estimated Overhead Cost $ 783,600 495,000 602,400 99,000 $ 1,980,000 $99.00 $ 53.00 $ 12.00 1.0 DLH 80,000 units Complete this question by entering your answers in the tabs below. Expected Activity Xtreme Pathfinder 40,000 Total 80,000 120,000 100 1 Batch setups (setups) Product sustaining (number of products) Other Total manufacturing overhead cost 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. 200 1 ΝΑ ΝΑ 300 2 NA
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