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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