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# Smoky Mountain Corporation makes two types of hiking boots—the Xtreme and the Pathfinder. Data concerning these

two product lines appear below:

.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):

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.

somebody can i help me to solve this problem?

pestaria
C Fact Pattern 2-1 Yos..
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apter 7
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Selling price per unit
Xtreme
Pathfinder
Direct materials per unit
\$ 132.00
Direct labor per unit
\$
64.60
\$
94.00
\$
53.00
Direct labor-hours per unit
9 .60
8.00
Estimated annual production and sales
1.2 DLHs
1.0 DLHs
24, 000 units
70, 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:
\$ 2, 470, 000
Estimated total direct labor-hours
98, 800 DLHs
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):
Estimated
Expected Activity
Activities and Activity Measures
Xtreme Pathfinder
Total
Supporting direct labor (direct labor-hours)
642, 200
28, 800 70,090
98, 800
Batch setups (setups)
915, 000
350
260
610
Product sustaining (number of products)
840, 060
2
Other
72, 800
NA
NA
NA
\$ 2, 470, 030
6
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1 Description Xtreme Pathfinder Per unit product margin... View the full answer

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