Xactive Pathbreaker Selling price per unit $ 127.00 $ 89.00 Direct materials per unit $ 64.80 $ 51.00 Direct labor per unit $ 18.20 $ 13.00 Direct labor-hours per unit 1.4 DLHs 1.0 DLHs Estimated...

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Xactive

Pathbreaker

Selling price per unit

$

127.00

$

89.00

Direct materials per unit

$

64.80

$

51.00

Direct labor per unit

$

18.20

$

13.00

Direct labor-hours per unit

1.4

DLHs

1.0

DLHs

Estimated annual production and sales

25,000

units

75,000

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

$2,200,000

Estimated total direct labor-hours

110,000 DLHs



















Required:

1.


Compute the product margins for the Xactive and the Pathbreaker products under the company's traditional costing system.
(Negative product margins should be indicated with a minus sign.)















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



Expected Activity



Activities and Activity Measures

Overhead Cost

Xactive

Pathbreaker

Total

Supporting direct labor (direct labor-hours)

$

797,500

35,000

75,000

110,000

Batch setups (setups)

680,000

250

150

400

Product sustaining (number of products)

650,000

1

1

2

Other

72,500

NA

NA

NA



Total manufacturing overhead cost

$

2,200,000





















Compute the product margins for the Xactive and the Pathbreaker products under the activity-based costing system.
(
Negative product margins should be indicated with a minus sign. Round your intermediate calculations to 2 decimal places.)


















3.


Prepare a quantitative comparison of the traditional and activity-based cost assignments.
(
Do not round intermediate calculations. Round your percentage answers to one decimal place.)




Answered Same DayDec 24, 2021

Answer To: Xactive Pathbreaker Selling price per unit $ 127.00 $ 89.00 Direct materials per unit $ 64.80 $...

David answered on Dec 24 2021
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