{"id":47766,"date":"2022-04-01T23:27:29","date_gmt":"2022-04-01T23:27:29","guid":{"rendered":"https:\/\/assignmenttutors.net\/blog\/smoky-mountain-corporation-makes-two-types-of-hiking-bootsxtreme-and\/"},"modified":"2022-04-01T23:27:29","modified_gmt":"2022-04-01T23:27:29","slug":"smoky-mountain-corporation-makes-two-types-of-hiking-bootsxtreme-and","status":"publish","type":"post","link":"https:\/\/assignmenttutors.net\/blog\/smoky-mountain-corporation-makes-two-types-of-hiking-bootsxtreme-and\/","title":{"rendered":"Smoky mountain corporation makes two types of hiking boots”xtreme and"},"content":{"rendered":"
\n

Smoky Mountain Corporation makes two types of hiking boots”Xtreme and the Pathfinder. Data concerning these two product lines appear below:<\/p>\n

\u00a0<\/p>\n\n\n\n\n\n\n\n\n
\u00a0<\/td>\nXactive<\/td>\nPathbreaker<\/td>\n<\/tr>\n
Selling price per unit<\/td>\n$<\/td>\n127.00<\/td>\n\u00a0<\/td>\n$<\/td>\n89.00<\/td>\n\u00a0<\/td>\n<\/tr>\n
Direct materials per unit<\/td>\n$<\/td>\n64.80<\/td>\n\u00a0<\/td>\n$<\/td>\n51.00<\/td>\n\u00a0<\/td>\n<\/tr>\n
Direct labor per unit<\/td>\n$<\/td>\n18.20<\/td>\n\u00a0<\/td>\n$<\/td>\n13.00<\/td>\n\u00a0<\/td>\n<\/tr>\n
Direct labor-hours per unit<\/td>\n\u00a0<\/td>\n1.4<\/td>\nDLHs<\/td>\n\u00a0<\/td>\n1.0<\/td>\nDLHs<\/td>\n<\/tr>\n
Estimated annual production and sales<\/td>\n\u00a0<\/td>\n25,000<\/td>\nunits<\/td>\n\u00a0<\/td>\n75,000<\/td>\nunits<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\u00a0<\/p>\n

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:<\/p>\n

Estimated total manufacturing overhead $2,200,000
Estimated total direct labor-hours 110,000 DLHs<\/p>\n

Requirement 1:
(a)
Calculate the predetermined overhead rate. (Round your answer to 2 decimal places. Omit the “$” sign in your response.)<\/p>\n

Predetermined overhead rate $<\/p>\n

(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.)<\/p>\n

Xtreme
Product margin – ?<\/p>\n

\u00a0<\/p>\n

Pathfinder<\/p>\n

Product margin – ?<\/p>\n

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):<\/p>\n

\u00a0<\/p>\n

\u00a0<\/p>\n

\u00a0<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n
Estimated<\/td>\n\n

Expected Activity<\/p>\n<\/td>\n<\/tr>\n

Activities and Activity Measures<\/td>\nOverhead Cost<\/td>\nXactive<\/td>\nPathbreaker<\/td>\nTotal<\/td>\n<\/tr>\n
Supporting direct labor (direct labor-hours)<\/td>\n$<\/td>\n797,500<\/td>\n35,000<\/td>\n75,000<\/td>\n110,000<\/td>\n<\/tr>\n
Batch setups (setups)<\/td>\n\u00a0<\/td>\n680,000<\/td>\n250<\/td>\n150<\/td>\n400<\/td>\n<\/tr>\n
Product sustaining (number of products)<\/td>\n\u00a0<\/td>\n650,000<\/td>\n1<\/td>\n1<\/td>\n2<\/td>\n<\/tr>\n
Other<\/td>\n\u00a0<\/td>\n72,500<\/td>\nNA<\/td>\nNA<\/td>\nNA<\/td>\n<\/tr>\n
\u00a0<\/td>\n\n\n<\/td>\n\n\n<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
Total manufacturing overhead cost<\/td>\n$<\/td>\n2,200,000<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\n\n\n\n<\/td>\n\n\n\n<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
\n\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\u00a0<\/p>\n

\u00a0<\/p>\n

\u00a0<\/p>\n

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.)<\/p>\n

Xtreme
Product margin – ?<\/p>\n

Pathfinder
Product margin -?<\/p>\n

\u00a0<\/p>\n

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 “$” & “%” signs in your response.)<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0<\/td>\nXactive<\/td>\nPathbreaker<\/td>\nTotal<\/td>\n<\/tr>\n
\u00a0<\/td>\nAmount<\/td>\n% of
Total Amount<\/td>\n		Amount<\/td>\n% of
Total Amount<\/td>\n		Amount<\/td>\n<\/tr>\n
Traditional Cost System<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
(Click to select)Supporting direct laborSelling and administrativeOtherDirect materialsBatch setupsProduct sustaining<\/td>\n$<\/td>\n%<\/td>\n$<\/td>\n%<\/td>\n$<\/td>\n<\/tr>\n
(Click to select)Direct laborBatch setupsOtherProduct sustainingSelling and administrativeSupporting direct labor<\/td>\n\u00a0<\/td>\n%<\/td>\n\u00a0<\/td>\n%<\/td>\n\u00a0<\/td>\n<\/tr>\n
(Click to select)OtherManufacturing overheadSelling and administrativeProduct sustainingBatch setupsSupporting direct labor<\/td>\n\u00a0<\/td>\n%<\/td>\n\u00a0<\/td>\n%<\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\n\n\n<\/td>\n\u00a0<\/td>\n\n\n<\/td>\n\u00a0<\/td>\n\n\n<\/td>\n<\/tr>\n
Total cost assigned to products<\/td>\n$<\/td>\n\u00a0<\/td>\n$<\/td>\n\u00a0<\/td>\n$<\/td>\n<\/tr>\n
\u00a0<\/td>\n\n\n\n<\/td>\n\u00a0<\/td>\n\n\n\n<\/td>\n\u00a0<\/td>\n\n\n\n<\/td>\n<\/tr>\n
\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
Activity-Based Costing System<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
Direct costs:<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
(Click to select)Batch setupsSelling and administrativeSupporting direct laborProduct sustainingDirect materialsManufacturing overhead<\/td>\n$<\/td>\n%<\/td>\n$<\/td>\n%<\/td>\n$<\/td>\n<\/tr>\n
(Click to select)Supporting direct laborBatch setupsSelling and administrativeManufacturing overheadProduct sustainingDirect laborOther<\/td>\n\u00a0<\/td>\n%<\/td>\n\u00a0<\/td>\n%<\/td>\n\u00a0<\/td>\n<\/tr>\n
Indirect costs:<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
(Click to select)Direct laborOtherSelling and administrativeManufacturing overheadDirect materialsSupporting direct labor<\/td>\n\u00a0<\/td>\n%<\/td>\n\u00a0<\/td>\n%<\/td>\n\u00a0<\/td>\n<\/tr>\n
(Click to select)Manufacturing overheadOtherSelling and administrativeBatch setupsDirect laborDirect materials<\/td>\n\u00a0<\/td>\n%<\/td>\n\u00a0<\/td>\n%<\/td>\n\u00a0<\/td>\n<\/tr>\n
(Click to select)OtherSelling and administrativeDirect laborManufacturing overheadProduct sustainingDirect materials<\/td>\n\u00a0<\/td>\n%<\/td>\n\u00a0<\/td>\n%<\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\n\n\n<\/td>\n\u00a0<\/td>\n\n\n<\/td>\n\u00a0<\/td>\n\n\n<\/td>\n<\/tr>\n
Total cost assigned to products<\/td>\n$<\/td>\n\u00a0<\/td>\n$<\/td>\n\u00a0<\/td>\n$<\/td>\n<\/tr>\n
\u00a0<\/td>\n\n\n\n<\/td>\n\u00a0<\/td>\n\n\n\n<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
Costs not assigned to products:<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
(Click to select)Direct laborDirect materialsSupporting direct laborBatch setupsOtherProduct sustaining<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\n\n<\/td>\n<\/tr>\n
Total cost<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n$<\/td>\n<\/tr>\n
\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\n\n\n<\/td>\n<\/tr>\n
\n\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Smoky Mountain Corporation makes two types of hiking boots”Xtreme and the Pathfinder. Data concerning these two product lines appear below: \u00a0 \u00a0 Xactive Pathbreaker Selling price per unit $ 127.00 \u00a0 $ 89.00 \u00a0 Direct materials per unit $ 64.80 \u00a0 $ 51.00 \u00a0 Direct labor per unit $ 18.20 \u00a0 $ 13.00 \u00a0 Direct […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16],"tags":[],"class_list":["post-47766","post","type-post","status-publish","format-standard","hentry","category-education"],"_links":{"self":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/47766","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/comments?post=47766"}],"version-history":[{"count":0,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/47766\/revisions"}],"wp:attachment":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/media?parent=47766"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/categories?post=47766"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/tags?post=47766"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}