PROBLEM $7-17$ Comparing Traditional and Activity$-$Based Product Margins LO$7-1,$ LO$7-3,$ LO$7-4,(0)7-5$

Smoky Mountain Corporation makes two types of hiking boots$-$the Xtreme and the Pathfinder. Data concerning these two product lines appear below:

$\backslash$table$[[,,$Xtreme$]],$ Pathfinder

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:

$\backslash$table$[[$Estimated total manufacturing overhead,$$1,980,000$

Chapter $8$ HW: Exercise $8-14$ tweil

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$14$

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delorercily las cars

A

Macliook Pro

Mre.

$509$

Chations

Due Mar $21$ by $11$:$59$pm

Points

$7\mathrm{.}7$

Submitting

a text entry box or a file upload

$25$

EXERCISE $8-14$ Sales and Production Budgets $(16)$ LO$8-2,(16)$ LO$8-3$

The marketing department of Jessi Corporation has wubmitted the following sales forscast for the apooming fiscal year $($all sales are on account$)$:

$\backslash$table$[[,$Itt Quarter,$2$nd Quarter,$3$nd Quarter,$4$th Quarter$],[$Bodyrted unit wiles,$11,000,12,000,14,000,13,000]]$

The selling price of the compang's prodact is $$18\mathrm{.}00$ per unit. Manajemest expects to collect $65\%$ of sales in the quarter in which the wies act made, $30\%$ in the following quarter, and $5\%$ of sales are expected to be uncollectible. The beginning balance of accounts receivable, all of which is expected to be collected in the first quarter, is $$70,200.$

The company expects to start the first quarter with $1,650$ units in finished goods inventory. Management desires an ending finibhed goods inventory in each quarter equal to $15\%$ of the next quarter's bodgeted swies. The desired ending finished zoods inventory for the fourth quarter is $1,850$ units.

Required:

Calculate the estimated wiles for each quarter of the fircal year and for the jear as a whole. $($Hint: Refer to r$($ Schedule $1$ for zuidance.$)$

Calculate the expected cash collections for each quarter of the fiscal ywar and for the year as a whole. $($Hist: Refer to $$ Schedele $1$ for zuidance.$)$

Calculate the required production in units of finished goods for each quarter of the fivcal year and for the year as a whole. $($Hint Refer to $3$ Schedile $2$ for guidance.$)$

Pber

$[$imi$4$