Mountain Shoe Corporation makes two types of hiking bootsthe Rugged and the Comfort. Data concerning these two product lines appear below: 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: Required: 1 . Compute the product margins for the Rugged and the Comfort products under the company's traditional costing system. 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 oost pools (the Other cost pool includes organization- sustaining costs and idle capacity costs): Estimated Expected Activity Overhead Activities and (Activity Measures) Cost Rugged Comfort Total Supporting direct labor (direct labor-hours) $ 783,600 40,000 80,000 120,000 Batch setups (setups) 495,000 200 100 300 Product Designs (number of Designs) 602,400 3 5 8 Other 99,000 NA NA NA Total manufacturing overhead cost $1,980,0003. Compute the product margins for the Rugged and the Comfort products under the activity-based costing system. 4. Explain why the traditional and activity-based cost assignments differ. What recommendation would you offer to management about pricing its products