Rocky Mountain Corporation makes two types of hiking boots-Xactive and the Pathbreaker. Data concerning these two product lines appear below:
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. (Loss amounts should be indicated with a minus sign. Omit the "tiny_mce_markerquot; sign in your response.)
Xactive Pathbreaker Total
Product margin $ $ $