Smoky mountain corporation makes two types of hiking

Assignment Help Accounting Basics

Reference no: EM13580834

Smoky Mountain Corporation makes two types of hiking boots%u2014Xtreme and the Pathfinder. Data concerning these two product lines appear below:

	Xtreme	Pathfinder
Selling price per unit	$141	$103
Direct materials per unit	$59	$45
Direct labor per unit	$36	$36
Direct labor-hours per unit	3 DLHs	3 DLHs
Estimated annual production	13,000 units	74,000 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	$4,332,600
Estimated total direct labor-hours	261,000 DLHs

Requirement 1:
(a)	Calculate the predetermined overhead rate.

Predetermined overhead rate

(b)	Compute the product margins for the Xtreme and the Pathfinder products under the company's traditional costing system.

	Xtreme	Pathfinder	Total
Product margin	$	$	$

Reference no: EM13580834

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