Compute the product margins for xtreme and pathfinde product

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Reference no: EM131977103

Problem

Smoky Mountain Corporation makes two types of hiking boots-Xtreme and the Pathfinder. Data concerning these two product lines appear below:

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):

			Expected Activity
Activities and Activity Measures	Estimated Overhead Cost	Xtreme	Pathfinder	Total
Supporting Direct Labor (Direct-Labor Hours)	$588,500	42,000	65,000	107,000
Batch Set-ups (Set-ups)	690,000	390	300	690
Product Sustaining (# of Products)	500,000	1	1	2
Other	40,500	N/A	N/A	N/A
Total Manufacturing Overhead Cost	$1,819,000

Required: Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system.

Reference no: EM131977103

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