Why the traditional and activity based cost assignments

Assignment Help Managerial Accounting
Reference no: EM13962998

Rocky Mountain Corporation makes two types of hiking bootsXactive and the Pathbreaker. 

Data concerning these two product lines appear below:

1363_260-B-M-A-A-B-C (905)-1.png

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


1. Using Exhibit 7-12 as a guide, compute the product margins for the Xactive and the Path-breaker 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):

523_260-B-M-A-A-B-C (905)-2.png

Using Exhibit 7-10 as a guide, compute the product margins for the Xactive and the Pathbreaker products under the activity-based costing system. 

3. Using Exhibit 7-13 as a guide, prepare a quantitative comparison of the traditional and activity-based cost assignments. Explain why the traditional and activity-based cost assignmentsdiffer.

Reference no: EM13962998

What should he do if he follows the emv criterion

A member of a group of medical practitioners is considering opening his own private medical practice. He estimates that if demand for his services is high he could realise a

Prepare a revised income statement for the month

Identify the fixed and variable costs from the above and comment on the cost behaviour - estimate the cost of goods manufactured and sold and prepare a revised income statemen

Does the group have any foreign currency transactions

ACC 303 Company Accounting: Assignment. Does the group have any foreign currency transactions? Any foreign subsidiary companies? How have they been accounted for in the finan

Direct costs of the brentwood store

The Shoe Department is one of many departments at the Brentwood Store. The central warehouse serves all of the company's stores - what is the total amount of the costs

Calculating manufacturing cost per unit

A Trucks Parts Manufacturer is approached by an European customer to fulfill a special one-time order for a product similar to one offered to domestic customers. Truck Parts

Cash conversion cycle-currency-demand deposits

Illustrate out the term cash conversion cycle (CCC), and describe why, holding other things constant, a firm's profitability would raise if it lowered its CCC.

What are the main features of an intangible asset

What are the main features of an intangible asset, as laid out in AASB 138 Intangible Assets. Explain how Pics Ltd's) expenditures on intangibles should be

Increase in income tax payable

The following schedule relates the income statement with cash flows from operating activities, derived by both the direct and indirect methods, in the format illustrated by Gr


Write a Review

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd