Order Smoky Mountain Corporation Assignment

Order Smoky Mountain Corporation Assignment
Smoky Mountain Corporation makes two types of hiking boots”Xtreme and the Pathfinder. Data concerning these two product lines appear below:
Xactive Pathbreaker
Selling price per unit $ 127.00 $ 89.00
Direct materials per unit $ 64.80 $ 51.00
Direct labor per unit $ 18.20 $ 13.00
Direct labor-hours per unit 1.4 DLHs 1.0 DLHs
Estimated annual production and sales 25,000 units 75,000 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 $2,200,000
Estimated total direct labor-hours 110,000 DLHs
Requirement 1:
(a)
Calculate the predetermined overhead rate. (Round your answer to 2 decimal places. Omit the “$” sign in your response.)
Predetermined overhead rate $
(b)
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.)
Xtreme
Product margin – ?
Pathfinder
Product margin – ?
Requirement 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 Xactive Pathbreaker Total
Supporting direct labor (direct labor-hours) $ 797,500 35,000 75,000 110,000
Batch setups (setups) 680,000 250 150 400
Product sustaining (number of products) 650,000 1 1 2
Other 72,500 NA NA NA
Total manufacturing overhead cost $ 2,200,000
Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system. (Negative amount should be indicated by a minus sign. Do not round your intermediate calculations. Omit the “$” sign in your response.)
Xtreme
Product margin – ?
Pathfinder
Product margin -?
Requirement 3:
Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Do not round your intermediate calculations. Round your predetermined overhead rate to 2 decimal places. Round your percentage values to 1 decimal places and round all other values to the nearest whole number. Omit the “$”

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