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 $ 128.00   $ 90.00   Direct materials per unit $ 63.10   $ 50.00   Direct labor per unit $ 12.00   $ 8.00   Direct labor-hours per unit   1.5 DLHs   1.0 DLHs Estimated annual production and sales   20,000 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 $ 2,100,000   Estimated total direct labor-hours   100,000 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):     EstimatedOverhead Cost Expected Activity Activities and Activity Measures Xtreme Pathfinder Total Supporting direct labor (direct labor-hours) $ 745,000   30,000 70,000 100,000 Batch setups (setups)   612,000   200 160 360 Product sustaining (number of products)   700,000   1 1 2 Other   43,000   NA NA NA Total manufacturing overhead cost $ 2,100,000             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.

Cane Company manufactures two products called Alpha and Beta that sell for $150 and $105, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 107,000 units of each product. Its average cost per unit for each product at this level of activity are given below:   Alpha Beta Direct materials $ 30 $ 10 Direct labor 25 20 Variable manufacturing overhead 12 10 Traceable fixed manufacturing overhead 21 23 Variable selling expenses 17 13 Common fixed expenses 20 15 Total cost per unit $ 125 $ 91 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. 1. Assume that Cane expects to produce and sell 55,000 Alphas during the current year. A supplier has offered to manufacture and deliver 55,000 Alphas to Cane for a price of $100 per unit. What is the financial…

Coast to Coast Surfboards Inc. manufactures and sells two styles of surfboards, Atlantic Wave and Pacific Pounder. These surfboards are sold in two regions, East Coast and West Coast. Information about the two surfboards is as follows: Atlantic Wave Pacific Pounder Sales price $450 $400 Variable cost of goods sold per unit (167) (192) Manufacturing margin per unit $283 $208 Variable selling expense per unit (202) (112) Contribution margin per unit $81 $96 The sales unit volume for the territories and products for the period is as follows: East Coast West Coast Atlantic Wave 2,440 1,220 Pacific Pounder 0 1,220 Question Content Area a . Prepare a contribution margin by sales territory report. Compute the contribution margin ratio for each territory as a whole percent, rounded to two decimal places, if required.

Sandhill Cap Springs produces and sells water filtration systems for homeowners. Information regarding its three models is shown below. Units sold Basic 1,098 Unit selling price $245 Unit variable cost $197 Basic Plus 414 $395 $283 Premium Total 288 1.800 $800 $414 The company's total fixed costs to produce the filtration systems are $163,520.

PowerTrain Sports Inc. manufactures and sells two styles of All Terrain Vehicles (ATVs), the Mountain Monster and Desert Dragon, from a single manufacturing facility. The manufacturing facility operates at 100% of capacity. The following per-unit information is available for the two products:   1   Mountain Monster Desert Dragon 2 Sales price $5,400.00 $5,300.00 3 Variable cost of goods sold 3,255.00 3,400.00 4 Manufacturing margin $2,145.00 $1,900.00 5 Variable selling expenses 1,065.00 946.00 6 Contribution margin $1,080.00 $954.00 7 Fixed expenses 485.00 305.00 8 Income from operations $595.00 $649.00       In addition, the following sales unit volume information for the period is as follows:   Mountain Monster Desert Dragon Sales unit volume 5,300 5,150   Required: a. Prepare a contribution margin by product report. Calculate the contribution margin ratio for each.…

Sheridan Optics manufactures two products: microscopes and telescopes. Information for each product is as follows. Microscopes Telescopes Sales price $ 34 53 Sales volume 406,565 178,500 Variable cost per unit 15 20 Annual traceable fixed expenses $ 3,003,300 $ 3,505,100 Annual allocated common fixed expenses $ 2,009,500 $ 2,006,700 Prepare a segment margin income statement for Sheridan Optics that provides detail on both the product lines and the company as a whole. (If the amount is negative then enter with a negative sign preceding the number, e.g. -5,125 or parenthesis, e.g. (5,125).) Microscopes Telescopes Total LA $ LA $ LA LA

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A-6