Prepare a quantitative comparison of the traditional and activity-based cost assignments

Saved 5 EOC 20pts Problem 5-17 (Algo) Comparing Traditional and Activity-Based Product Margins [LO5-1, LO5- LO5-5] Smoky Mountain Corporation makes two types of hiking boots--the Xtreme and the Pathfinder. Data concerning these 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 $115.00 $ 65.10 $ 10.00 1. DLHS 29,000 units Pathfinder $ 83.00 $ 50.00 $ 10.00 1.6 DLHS 71,000 units The company has a traditional costing system in which manufacturing overhead is applied to units based on direct laba concerning manufacturing overhead and direct labor-hours for the upcoming year appear below: $ Estimated total manufacturing overhead Estimated total direct labor-hours 1,800,000 100,000 DLHS Required: 1. Compute the product margins for the Xtreme and the Pathfinder products under the company's traditional costing sys 2. The company is considering replacing its traditional costing system with an activity-based costing system that would manufacturing overhead to the following four activity cost pools (the Other cost pool includes organization-sustaining c capacity costs): Estimated Overhead Cost $ 520,000 781,000 440,000 59,000 $ 1,800,000 Expected Activity Xtreme Pathfinder Total 29,000 71.000 100,000 400 310 Activities and Activity Measures Supporting direct labor (direct labor-hours) Batch setups (setups) Product sustaining (number of products) Other Total manufacturing overhead cost 710 NA Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system, 3 Prenare a quantitative comnarison of the traditional and activity based cost assionments