Solution-Compute the product margins for xtreme and

Compute the product margins for xtreme and pathfinder

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Reference no: EM13856515

Problem: Smoky Mountain Corporation makes two types of hiking boots-Xtreme and the Pathfinder. Date concerning these two products lines appears below:

	Xtreme	Pathfinder
Selling price per unit	$140.00	$99.00
Direct material per unit	$72.00	$53.00
Direct labor per unit	$24.00	$12.00
Direct labor hour per unit	2.0 DLHs	1.0 DLHs
Estimated annual production and sales	20,000 units	80,000 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........................$1,980,000

Estimated total direct labor-hours................................120,000 DLHs

Required:

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

Reference no: EM13856515

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Compute the product margins for xtreme and pathfinder

Reference no: EM13856515

Reference no: EM13856515

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