4. 20 noints) Rocky Mountain Corporation makes two types of hiking boots-Xactive

Question

4. 20 noints) Rocky Mountain Corporation makes two types of hiking boots-Xactive and the Pathbreaker 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 Pathbreaker S 87.00 S 55.00 S 10.00 S120.00 S 63.60 S 12.00 1.2 DLHs 1.0 DLHs 25,000 units 72,000 units The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data appear below: concerning manufacturing overhead and direct labor-hours for the upcoming year Estimated total manufacturing overhead Estimated total direct labor-hours $2,040,000 102,000 DLHs Required a) Compute the product margins for the Xactive and the Pathbreaker products under the company's traditional costing system. (6 points) Input your answer for a) in the following table: 11tra ,a anal Product margin ofXactive costing system Product margin of Pathbreaker

Explanation / Answer

1. Product Margin under Traditional costing is:

2. Activity rate under ABC is as calculated below:

3.

Product Margin under ABC is:

Product margin under traditional system is Xavtive Pathbreaker Total A No. of units 25,000 72,000 97,000 B Sale price per unit 120 87 C=A*B Sale Value 3,000,000 6,264,000 9,264,000 D Direct Material 1,590,000 3,960,000 5,550,000 E Direct Labor 300,000 720,000 1,020,000 F=D+E Total Direct Costs 1,890,000 4,680,000 6,570,000 G Manufacturing Overhead 600,000 1,440,000 2,040,000 H =F+G Total Product Cost 2,490,000 6,120,000 8,610,000 I=C-H Product Margin 510,000 144,000 654,000

Related Questions

Navigate

• Browse (All)
• Browse 4
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.