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) Batch setups (setups) Product sustaining (number of products) Other Total manufacturing overhead cost $ 120.00 $ 65.20 $11.20 1.4 OLHS 30,000 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: Required 1 Required 2 Required 3 Pathfinder $ 87.00 $ 51.00 $8.00 1.0 DLH 65,000 units 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 cast pool includes organization-sustaining costs and idle capacity costs): $ 2,093,000 107.000 DLHS Estimated Overhead Cost Complete this question by entering your answers in the tabs below. $631,300 876,000 460,000 65,700 $ 2,033,000 Expected Activity Xtreme Pathfinder 42,000 65,000 410 1 NA 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. 320 1 NA Total 107,000 730 2 NA 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.
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) Batch setups (setups) Product sustaining (number of products) Other Total manufacturing overhead cost $ 120.00 $ 65.20 $11.20 1.4 OLHS 30,000 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: Required 1 Required 2 Required 3 Pathfinder $ 87.00 $ 51.00 $8.00 1.0 DLH 65,000 units 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 cast pool includes organization-sustaining costs and idle capacity costs): $ 2,093,000 107.000 DLHS Estimated Overhead Cost Complete this question by entering your answers in the tabs below. $631,300 876,000 460,000 65,700 $ 2,033,000 Expected Activity Xtreme Pathfinder 42,000 65,000 410 1 NA 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. 320 1 NA Total 107,000 730 2 NA 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.
Chapter1: Financial Statements And Business Decisions
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Variance Analysis
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Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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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
Estimated total manufacturing overhead
Estimated total direct labor-hours
Xtreme
$ 120.00
$65.20
$11.20
Activities and (Activity Measures)
Supporting direct labor (direct labor-hours)
1.4 DLHS
30,000 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:
Pathfinder
$ 87.00
$ 51.00
$8.00
1.0 DLH
65,000 units
$ 2,033,000
107.000 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):
Estimated
Overhead Cost
$631,300
876,000
460,000
65,700
$2,033,000
Complete this question by entering your answers in the tabs below.
Expected Activity
Pathfinder
65,000
Xtreme
42,000
410
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.
1
NA
320
1
NA
Total
107,000
730
2
NA
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.
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Step 1: Introduction of costing method
VIEWStep 2: Requirement 1 - Computation of product margin under traditional costing system
VIEWStep 3: Requirement 2 - Computation of product margin under ABC costing system
VIEWStep 4: Requirement 3 - Prepare a quantitative comparison of traditional and ABC cost systems
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