Question

PROBLEM 7-17 Comparing Traditional and Activity-Based Product Margins 07-L07-3, 1107-4 107-5 Smoky Mountain Cerpen makes two types of biking both Xtreme and the Pind Detector les appear Xentre Pune Selling price per $140.00 $99.00 Direct mails per 72.00 $55.00 Direct labore $24.00 Duet abbons per 20 DLH 1. DIE Estimated products and a 20.000 30.000 $12.00 The company has a total costing systems in which manufacturing overheadsed to directores De Coming vechead and direct laborhoors for the below Estimated to manufactured $1.000 Estimated to direct labore 120.000 DE Required: 1. Uning shit 7-13 a compute the products for the Past the traditional casting. 2. The company is coming relational content and contato manufacturing ved to the following cost pe the other colonies die capacity to Activities and Activity Meer Sporting director (diretor Batchups Cup Products of product Expected Act Es Owend Cow Puthier Tel $703.600 10 000 80.000 120,000 495.000 200 Dod 600,400

Answer 1

Solution 1:
Overhead Allocation - Traditional Costing System
Particulars	Xtreme	Pathfinder	Total
Estimated annual Production (In units)	20000	80000
Direct Labour Hours Per unit	2	1
Total Direct Labour Hours	40000	80000	120000
Overhead Cost Allocation basis direct labour hours (Overhead / Total hours * Labor hours of model)	$660,000.00	$1,320,000.00	$1,980,000.00
Manufacturing overhead cost per unit (Allocated Overhead / Nos of units)	$33.00	$16.50

Computation of Product Margin - Traditional Costing System
Particulars	Xtreme	Pathfinder	Total
Selling price per unit	$140.00	$99.00
Direct material per unit	$72.00	$53.00
Direct labor per unit	$24.00	$12.00
Manufacturing overhead cost per unit	$33.00	$16.50
Product Margin per unit	$11.00	$17.50
Nos of units sold	20000	80000
Total Margin (Product margin per unit * Nos of unit sold)	$220,000.00	$1,400,000.00	$1,620,000.00

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Computation of Product Margin - Activity based Costing System
Particulars	Xtreme	Pathfinder	Total
Selling price per unit	$140.00	$99.00
Direct material per unit	$72.00	$53.00
Direct labor per unit	$24.00	$12.00
Allocated Manufacturing overhead cost per unit	$44.62	$12.36
Product Margin per unit	-$0.62	$21.64
Nos of units sold	20000	80000
Total Margin (Product margin per unit * Nos of unit sold)	-$12,400.00	$1,731,400.00	$1,719,000.00

XI - 0 Pa Excel 8.xlsx - Microsoft Excel X File Home Insert Page Layout Formulas Data Review View A OP X Σ AutoSum και Calibri 11 AA Wrap Text General HA H AU Fill % Cut E Copy Paste Format Painter Clipboard BI U - A- Merge & Center +.0 .00 .00 .0 Insert Delete Format Conditional Format Cell Formatting as Table - Styles Styles 2 Clear Sort & Find & Filter - Select Editing Font Alignment Number Cells AX1 fic AK AL AM AN AO AP AQ AR AS AT AU AV AW AX 1 2 3 4 5 6 Solution 3: 7 Quantity comparison of traditional cost assignment Xtreme Pathfinder Total Particulars 8 9 10 11 Direct Material Cost Direct Labor Cost Amount $1,440,000.00 $480,000.00 % of total Amount Amount 25.4% $4,240,000.00 33.3% $960,000.00 % of total Amount Amount 74.6% $5,680,000.00 66.7% $1,440,000.00 12 Manufacturing Overhead cost $660,000.00 33.3% $1,320,000.00 66.7% $1,980,000.00 13 Total Cost assigned to Product $2,580,000.00 $6,520,000.00 $9,100,000.00 14 15 16 17 Particulars 18 19 Direct Cost: Sheet653 Sheet654 Sheet654 Sheet655 Sheet656 Select destination and press ENTER or choose Paste Quantity comparison of Activity Based cost assignment Xtreme Pathfinder Amount % of total Amount Amount % of total Amount Total Amount Sheet658 Sheet641 Sheet696 (5) Sheet659 Sheet15 (3) HE IL 100% Answers Chegg - Google C... W x Excel_8.1.xlsx Excel 8.xlsx 6:34 AM 7/15/2020

XI - 0 Pa Excel 8.xlsx - Microsoft Excel X File Home Insert Page Layout Formulas Data Review View A OP X I! Σ AutoSum και % Cut Eg Copy Calibri 11 AA Wrap Text General H/ AU Fill Paste BIU- А Merge & Center +.0 .00 .00 .0 Insert Delete Format Format Painter Conditional Format Cell Formatting as Table - Styles Styles 2 Clear Sort & Find & Filter - Select Editing Clipboard Font Alignment Number Cells AX15 AK AL AM AN AO AP AQ AR AS AT AU AV AW AX 15 16 17 Quantity comparison of Activity Based cost assignment Xtreme Pathfinder Amount % of total Amount Amount % of total Amount Particulars Total Amount 18 19 20 Direct Cost: Direct Material Cost Direct Labor Cost $1,440,000.00 $480,000.00 25.4% $4,240,000.00 33.3% $960,000.00 74.6% $5,680,000.00 66.7% $1,440,000.00 21 Indirect Cost: 22 23 Supporting direct labor cost Batch Setups $261,200.00 $330,000.00 33.3% 66.7% $522,400.00 $165,000.00 66.7% 33.3% $783,600.00 $495,000.00 24 Product sustaining $301,200.00 50.0% $301,200.00 50.0% $602,400.00 25 26 Total Cost Assigned to Products $2,812,400.00 $6,188,600.000 $9,001,000.00 27 28 Cost not assigned to products: Others 29 $99,000.00 Total Cost $9,100,000.00 30 31 Sheet654 Sheet655 Sheet656 Sheet658 Sheet641 Sheet696 (5) Sheet659 Sheet15 (3) KI Ready Sheet653 Circular References HE IL 100% Answers Chegg - Google C... W OC x Excel_8.1.xlsx Excel 8.xlsx 6:34 AM 7/15/2020