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Smoky Mountain Corporation makes two types of hiking bootsthe Xtreme and the Pathfinder. Data concerning these two product lines appear below: Xtreme Pathfinder Selling price per unit $ 120.00 $ 87.00 Direct materials per unit 5 63.60 $ 55.00 Direct labor per unit $ 12.00 $ 10.00 Direct labor-hours per unit 1.2 DLHe 1.0 DLHs Estimated annual production and sales 25,000 units 72,000 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 $ 2,040,000 Estimated total direct labor-hours 102,000 DLHs Required: 1. Compute the product margins for the Xtreme and the Pathfinder products under the company's traditional costing system. 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 Xtreme Pathfinder Total Supporting direct labor (direct labor-hours) $ 622,200 30,000 72,000 102,000 Batch setups (setups) 644,000 250 210 460 Product sustaining (number of products) 700,000 1 1 2 other 73 , 800 NA NA NA Total manufacturing overhead cost $ 2,040,000 [ Compute the product margins for the Xtreme and the Pathnder products under the activity-based costing system. 3. Prepare a quantitative comparison of the traditional and activity-based cost assignments