The company is considering replacing its traditional costing system with an acti
ID: 2379182 • Letter: T
Question
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):
Expected Activity
Compute the product margins for the Xactive and the Pathbreaker products under the activity-based costing system. (Loss amounts should be indicated with a minus sign. Round your intermediate calculations to 2 decimal places and final answers to the nearest dollar amount. Omit the "$" sign in your response.)
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) $ 977,500 45,000 70,000 115,000 Batch setups (setups) 612,000 300 210 510 Product sustaining (number of products) 700,000 1 1 2 Other 10,500 NA NA NA Total manufacturing overhead cost $ 2,300,000Compute the product margins for the Xactive and the Pathbreaker products under the activity-based costing system. (Loss amounts should be indicated with a minus sign. Round your intermediate calculations to 2 decimal places and final answers to the nearest dollar amount. Omit the "$" sign in your response.)
Xactive Pathbreaker Total Product margin $ $ $
Explanation / Answer
working: