90.2K

Verified Solution

Link Copied!

Smoky Mountain Corporation makes two types of hiking bootsthe Xtreme and the 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 $123.00 $ 63.80 $ 10.80 1.2 DLRS 27.000 units Pathfinder $ 86.00 $ 50.00 $ 9.00 1.0 DLRS 74,000 wnits The company has a traditional costing system in which manufacturing overhead is applied 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 $ 2,340,800 106,400 DLR Required: 1. Compute the product margins for the Xtreme and the Pathfinder products 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 laborehours) Product wastaining (number of products) Other Total manufacturing overhond cost Estimated Expected Activity Overhead Cost Xtreme Pathfinder Total $691,600 32,400 74,000 106,400 900,000 270 500 700,000 1 1 2 49200 NA NA NA $ 2,340.800 230 Compute the product margins for the Xtreme and the Pathfinder products 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 the Xtreme and the Pathfinder products under the company's traditional costing system, (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.) Pathfinder Total Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system (Round your intermediate calculations to 2 decimal places.) Xtreme Pathfinder Total Product margin 0 Complete this question by entering your answers in the tabs below. 8010432 Required 1 Required 2 Required 3 Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations to 2 decimal places and "Percentage answers to 1 decimal place.) Xtreme Pathfinder Total % of % of Amount Total Amount Amount Total Amount Amount Traditional Cost System % % Total cost designed to products $ 0 $ 0 Total Xtreme % of Amount Total Amount Pathfinder % of Amount Total Amount Amount Activity Based Costing System Direct costs * % Indirect costs * % % % $ $ Total cost assigned to products Costs not assigned to products 0 $ 0 Total cost $ 0

Answer & Explanation Solved by verified expert

See Answer