Smoky Mountain Corporation makes two types of hiking boots%u2014Xtreme and the P

Question

Smoky Mountain Corporation makes two types of hiking boots%u2014Xtreme and the Pathfinder. Data concerning these two product lines appear below:

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:

Calculate the predetermined overhead rate. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Compute the product margins for the Xtreme and the Pathfinder products under the company's traditional costing system. (Negative amount should be indicated by a minus sign. Round your predetermined overhead rate to 2 decimal places. Round your answers to the nearest dollar amount. Omit the "$" sign in your response.)

Smoky Mountain Corporation makes two types of hiking boots%u2014Xtreme and the Pathfinder. Data concerning these two product lines appear below:

Explanation / Answer

Predetermined overhead rate = Est. total Manuf. Overhead Cost / Est. total amt of allocation base

In this case, allocation base would be direct labor (as opposed to machine labor).

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