3.. Smoky Mountain Corporation makes two types of hiking boots—Xtreme and the Pa
ID: 2474130 • Letter: 3
Question
3.. Smoky Mountain Corporation makes two types of hiking boots—Xtreme and the Pathfinder. Data concerning these two product lines appear below:
Xtreme
Pathfinder
Selling price per unit
$
125.00
$
91.00
Direct materials per unit
$
64.20
$
55.00
Direct labor per unit
$
16.00
$
10.00
Direct labor-hours per unit
1.6
DLHs
1.0
DLHs
Estimated annual production and sales
25,000
units
71,000
units
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
$2,331,000
Estimated total direct labor-hours
111,000 DLHs
Required:
1.
Compute the product margins for the Xtreme and the Pathfinder products under the company’s traditional costing system. (Do not round your intermediate calculations.)
Xtreme
Pathfinder
Total
Product margin
$0
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
Expected Activity
Activities and Activity Measures
Overhead Cost
Xtreme
Pathfinder
Total
Supporting direct labor (direct labor-hours)
$
888,000
40,000
71,000
111,000
Batch setups (setups)
583,000
310
220
530
Product sustaining (number of products)
780,000
1
1
2
Other
80,000
NA
NA
NA
Total manufacturing overhead cost
$
2,331,000
Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system. (Negative product margins should be indicated with a minus sign. Round your intermediate calculations to 2 decimal places.)
Xtreme
Pathfinder
Total
Product margin
$0
3.
Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Do not round intermediate calculations. Round your "Percentage" answer to 1 decimal place. (i.e. .1234 should be entered as 12.3))
3.. Smoky Mountain Corporation makes two types of hiking boots—Xtreme and the Pathfinder. Data concerning these two product lines appear below:
Pathfinder Total Xtreme %of %of Total Amount Amount Total Amount Amount Amount Traditional Cost System Total cost assigned to products Pathfinder Total Xtreme %of %of Total Amount Amount Total Amount Amount Amount Activity-Based Costing System Direct costs Indirect costs Total cost assigned to products Costs not assigned to products 0 Total costExplanation / Answer
Answer:1 MOH per direct labor hour =$2,331,000 /111,000 =$21.00
Answer:2
Answer:3
Particulars Xtreme Pathfinder Total SP Per unit 125 91 216 Direct materials per unit 64.2 55 119.2 Direct labor per unit 16 10 26 Manufacturing overhead 33.6 21 54.6 Total costs 113.8 86 199.8 Product Margin 11.2 5 16.2Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.