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e 7 Homework Srved Smoky Mountain Corporation makes two types of hiking boots--the Xtreme and the Pathfinder. Data concerning thes. lines appear below. Selling price per unit Direct materials per unit Direct labor per unit Direct labor-hours per unit Estimated annual production and sales Xtreme $120.00 $63.60 $ 12.00 1.2 DL 25,000 units Pathfinder $ 87.00 $ 55.00 $ 10.00 1.0 LI 72,000 units The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labu concerning manufacturing overhead and direct labor-hours for the upcoming year appear below: ences Estimated total manufacturing overhead Estimated total direct labor-hours $ 2,040,000 102,000 DLR Required: 1. Compute the product margins for the Xtreme and the Pathfinder products under the company's traditional costing sy 2. The company is considering replacing its traditional costing system with aractivity based costing system that would manufacturing overhead to the following four activity cost pools (the Other cost pool includes organization-sustaining capacity costs): Activities and Activity Measures Supporting direct labor (direct labor-hours) Batch setups (setupa) Product sustaining number of produeta) Other Total manufacturing overhead coat Estimated Expected Activity Overhead Coat Xtreme Pathfinder Total $ 622,200 30,000 72.000 102.000 644,000 250 210 460 700,000 1 1 2 73.800 NA NA $ 2,040,000