Questions
Smoky Mountain Corporation makes two types of hiking boots—the Xtreme and the Pathfinder. Data concerning these...
Smoky Mountain Corporation makes two types of hiking boots—the Xtreme and the Pathfinder. Data concerning these two product lines appear below:
| Xtreme | Pathfinder | |||||
| Selling price per unit | $ | 132.00 | $ | 94.00 | ||
| Direct materials per unit | $ | 64.60 | $ | 53.00 | ||
| Direct labor per unit | $ | 9.60 | $ | 8.00 | ||
| Direct labor-hours per unit | 1.2 | DLHs | 1.0 | DLHs | ||
| Estimated annual production and sales | 24,000 | units | 70,000 | 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 | $ | 2,470,000 | ||
| Estimated total direct labor-hours | 98,800 | DLHs | ||
Required:
1. Compute the product margins for the Xtreme and the Pathfinder 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):
| Estimated Overhead Cost |
Expected Activity | |||||
| Activities and Activity Measures | Xtreme | Pathfinder | Total | |||
| Supporting direct labor (direct labor-hours) | $ | 642,200 | 28,800 | 70,000 | 98,800 | |
| Batch setups (setups) | 915,000 | 350 | 260 | 610 | ||
| Product sustaining (number of products) | 840,000 | 1 | 1 | 2 | ||
| Other | 72,800 | NA | NA | NA | ||
| Total manufacturing overhead cost | $ | 2,470,000 | ||||
Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system.
3. Prepare a quantitative comparison of the traditional and activity-based cost assignments.
Compute the product margins for the Xtreme and the Pathfinder products under the company’s traditional costing system. (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.)
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Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system. (Round your intermediate calculations to 2 decimal places.)
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Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations to 2 decimal places and "Percentage" answers to 1 decimal place.)
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In: Accounting
Smoky Mountain Corporation makes two types of hiking boots—the Xtreme and the Pathfinder. Data concerning these...
Smoky Mountain Corporation makes two types of hiking boots—the Xtreme and the Pathfinder. Data concerning these two product lines appear below:
| Xtreme | Pathfinder | |||||
| Selling price per unit | $ | 118.00 | $ | 84.00 | ||
| Direct materials per unit | $ | 65.00 | $ | 52.00 | ||
| Direct labor per unit | $ | 13.50 | $ | 9.00 | ||
| Direct labor-hours per unit | 1.5 | DLHs | 1.0 | DLHs | ||
| Estimated annual production and sales | 28,000 | units | 65,000 | 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 | $ | 1,819,000 | ||
| Estimated total direct labor-hours | 107,000 | DLHs | ||
Required:
1. Compute the product margins for the Xtreme and the Pathfinder 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):
| Estimated Overhead Cost |
Expected Activity | |||||
| Activities and Activity Measures | Xtreme | Pathfinder | Total | |||
| Supporting direct labor (direct labor-hours) | $ | 588,500 | 42,000 | 65,000 | 107,000 | |
| Batch setups (setups) | 690,000 | 390 | 300 | 690 | ||
| Product sustaining (number of products) | 500,000 | 1 | 1 | 2 | ||
| Other | 40,500 | NA | NA | NA | ||
| Total manufacturing overhead cost | $ | 1,819,000 | ||||
Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system.
3. Prepare a quantitative comparison of the traditional and activity-based cost assignments.
Compute the product margins for the Xtreme and the Pathfinder products under the company’s traditional costing system. (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.)
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Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system. (Round your intermediate calculations to 2 decimal places.)
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Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations to 2 decimal places.)
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In: Accounting
Problem 7-17 Comparing Traditional and Activity-Based Product Margins [LO7-1, LO7-3, LO7-4, LO7-5] Smoky Mountain Corporation makes...
Problem 7-17 Comparing Traditional and Activity-Based Product Margins [LO7-1, LO7-3, LO7-4, LO7-5] Smoky Mountain Corporation makes two types of hiking boots—the Xtreme and the Pathfinder. Data concerning these two product lines appear below: Xtreme Pathfinder Selling price per unit $ 120.00 $ 92.00 Direct materials per unit $ 63.50 $ 54.00 Direct labor per unit $ 13.50 $ 9.00 Direct labor-hours per unit 1.5 DLHs 1.0 DLHs Estimated annual production and sales 24,000 units 71,000 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 $ 2,033,000 Estimated total direct labor-hours 107,000 DLHs Required: 1. Compute the product margins for the Xtreme and the Pathfinder 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): Estimated Overhead Cost Expected Activity Activities and Activity Measures Xtreme Pathfinder Total Supporting direct labor (direct labor-hours) $ 663,400 36,000 71,000 107,000 Batch setups (setups) 572,000 240 200 440 Product sustaining (number of products) 750,000 1 1 2 Other 47,600 NA NA NA Total manufacturing overhead cost $ 2,033,000 Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system. 3. Prepare a quantitative comparison of the traditional and activity-based cost assignments.
Compute the product margins for the Xtreme and the Pathfinder products under the company’s traditional costing system. (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.)
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Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system. (Round your intermediate calculations to 2 decimal places.)
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Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations to 2 decimal places.)
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Required 2
In: Accounting
Smoky Mountain Corporation makes two types of hiking boots—the Xtreme and the Pathfinder. Data concerning these...
Smoky Mountain Corporation makes two types of hiking boots—the Xtreme and the Pathfinder. Data concerning these two product lines appear below:
| Xtreme | Pathfinder | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Selling price per unit | $ | 118.00 | $ | 84.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Direct materials per unit | $ | 65.00 | $ | 52.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Direct labor per unit | $ | 13.50 | $ | 9.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Direct labor-hours per unit | 1.5 | DLHs | 1.0 | DLHs | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Estimated annual production and sales | 28,000 | units | 65,000 | units | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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:
Required: 1. Compute the product margins for the Xtreme and the Pathfinder 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):
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In: Accounting
A firm uses two inputs in production: capital and labor. In the short run, the firm...
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A firm uses two inputs in production: capital and labor. In the short run, the firm cannot adjust the amount of capital it is using, but it can adjust the size of its workforce.
--If the cost of renting capital increases, which of the following curves will be affected? (Check all answers that apply).
--
Average variable cost
Marginal cost
Average fixed cost
Average total cost
2 points
QUESTION 2
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If the cost of hiring workers increases, which of the following curves will be affected? (Check all answers that apply).
--
Marginal cost
Average variable cost
Average total cost
Average fixed cost
In: Economics
Martinez Company’s relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows:
Martinez Company’s relevant range of production is 7,500 units to 12,500 units. When it produces
and sells 10,000 units, its average costs per unit are as follows:
Average Cost
per Unit
Direct materials . . . . . . . . . . . . . . . . . . . . . . . . $6.00
Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . $3.50
Variable manufacturing overhead . . . . . . . $1.50
Fixed manufacturing overhead . . . . . . . . . . $4.00
Fixed selling expense . . . . . . . . . . . . . . . . . . $3.00
Fixed administrative expense . . . . . . . . . . . $2.00
Sales commissions . . . . . . . . . . . . . . . . . . . . $1.00
Variable administrative expense . . . . . . . . . $0.50
Required:
1. For financial accounting purposes, what is the total amount of product costs incurred to
make 10,000 units?
2. For financial accounting purposes, what is the total amount of period costs incurred to sell
10,000 units?
3. If 8,000 units are produced and sold, what is the variable cost per unit produced and sold?
4. If 12,500 units are produced and sold, what is the variable cost per unit produced and sold?
5. If 8,000 units are produced and sold, what is the total amount of variable costs related to the
units produced and sold?
6. If 12,500 units are produced and sold, what is the total amount of variable costs related to the
units produced and sold?
7. If 8,000 units are produced, what is the average fixed manufacturing cost per unit produced?
8. If 12,500 units are produced, what is the average fixed manufacturing cost per unit produced?
9. If 8,000 units are produced, what is the total amount of fixed manufacturing cost incurred to
support this level of production?
10. If 12,500 units are produced, what is the total amount of fixed manufacturing cost incurred
to support this level of production?
11. If 8,000 units are produced, what is the total amount of manufacturing overhead cost incurred
to support this level of production? What is this total amount expressed on a per unit basis?
12. If 12,500 units are produced, what is the total amount of manufacturing overhead cost incurred
to support this level of production? What is this total amount expressed on a per unit basis?
13. If the selling price is $22 per unit, what is the contribution margin per unit?
14. If 11,000 units are produced, what are the total amounts of direct and indirect manufacturing
costs incurred to support this level of production?
15. What incremental manufacturing cost will Martinez incur if it increases production from
10,000 to 10,001 units?
In: Accounting
Martinez Company’s relevant range of production is 7,500 units to 12,500 units. When it produces and...
Martinez Company’s relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows:
| Average Cost Per Unit | |||
| Direct materials | $ | 5.60 | |
| Direct labor | $ | 3.10 | |
| Variable manufacturing overhead | $ | 1.40 | |
| Fixed manufacturing overhead | $ | 4.00 | |
| Fixed selling expense | $ | 2.60 | |
| Fixed administrative expense | $ | 2.20 | |
| Sales commissions | $ | 1.20 | |
| Variable administrative expense | $ |
0.45 |
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1. For financial accounting purposes, what is the total amount of product costs incurred to make 10,000 units?
2. For financial accounting purposes, what is the total amount of period costs incurred to sell 10,000 units?
3. If 8,000 units are produced and sold, what is the variable cost per unit produced and sold?
4.If 12,500 units are produced and sold, what is the variable cost per unit produced and sold?
5. If 8,000 units are produced and sold, what is the total amount of variable costs related to the units produced and sold?
6. If 12,500 units are produced and sold, what is the total amount of variable costs related to the units produced and sold?
7. If 8,000 units are produced, what is the average fixed manufacturing cost per unit produced?
8. If 12,500 units are produced, what is the average fixed manufacturing cost per unit produced?
9. If 8,000 units are produced, what is the total amount of fixed manufacturing cost incurred to support this level of production?
10. If 12,500 units are produced, what is the total amount of fixed manufacturing cost incurred to support this level of production?
11. If 8,000 units are produced, what is the total amount of manufacturing overhead cost incurred to support this level of production? What is this total amount expressed on a per unit basis?
12. If 12,500 units are produced, what is the total amount of manufacturing overhead cost incurred to support this level of production? What is this total amount expressed on a per unit basis?
13. If the selling price is $21.60 per unit, what is the contribution margin per unit?
14. If 10,000 units are produced, what are the total amounts of direct and indirect manufacturing costs incurred to support this level of production
15. What incremental manufacturing cost will Martinez incur if it increases production from 10,000 to 10,001 units?
In: Accounting
For each of the regions, use the midpoint method to identify whether the supply of this good is elastic or inelastic.
For each of the regions, use the midpoint method to identify whether the supply of this good is elastic or inelastic.
True or False: For high levels of quantity supplied where firms have reached near maximum capacity, supply becomes less elastic because firms may need to invest in additional capital in order to increase production further.
In: Economics
Which of these risks would most likely be a diversifiable risk for investors? A. The US...
Which of these risks would most likely be a diversifiable risk for investors?
A. The US dollar strengthens, making exports more expensive for non-US customers
B. Congress passes legislation that raises the corporate tax rate.
C. A hurricane damages factories near the Gulf Coast.
D. The Federal Reserve increases the interest rate.
In: Finance
What is the current in a wire of radius R = 3.58 mm if the magnitude...
What is the current in a wire of radius R = 3.58 mm if the magnitude of the current density is given by (a) Ja = J0r/R and (b) Jb = J0(1 - r/R) in which r is the radial distance and J0 = 5.08 × 10^4 A/m^2? (c) Which function maximizes the current density near the wire’s surface?
In: Physics