Problem 7-17 (Algo) Comparing Traditional and Activity-Based Product Margins [LO7-1, LO7-3, LO7-4, LO7-5] Smoky Mountain Corporation makes two types of hiking boots-Xtreme and Pathfinder. Data concerning these two product lines appear below: Selling price per unit Xtreme Pathfinder $ 115.00 $ 84.00 $ 65.50 $ 54.00 $ 8.00 1.0 61,000 DLH units Direct materials per unit Direct labor per unit $ 13.60 Direct labor-hours per unit Estimated annual production and sales 1.7 DLHS 33,000 units The company has a traditional costing system that applies manufacturing overhead 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 Estimated total direct labor-hours Required: $ 1,756,500 117,100 DLHS 1. Compute the product margins for Xtreme and Pathfinder 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): Activities and (Activity Measures). Supporting direct labor (direct labor-hours) Batch setups (setups) Product sustaining (number of products) Other Estimated Overhead Cost $ 526,950 790,000 400,000 Total manufacturing overhead cost Expected Activity Xtreme Pathfinder Total 56,100 61,000 440 350 1 1 117,100 790 2 39,550 NA NA $ 1,756,500 Compute the product margins for Xtreme and Pathfinder under the activity-based costing system. 3. Prepare a quantitative comparison of the traditional and activity-based cost assignments. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the product margins for Xtreme and Pathfinder under the company's traditional costing system. Note: Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount. Xtreme Product margin $ 13 $ Pathfinder Total 14 $ 27 Required 2 > < Required 1 Required 1 Required 2 Required 3 Compute the product margins Xtreme and Pathfinder under the activity-based costing system. Note: Round your intermediate calculations to 2 decimal places. Product margin Xtreme Pathfinder Total $ 0 < Required 1 Required 3 > Required 1 Required 2 Required 3 Prepare a quantitative comparison of the traditional and activity-based cost assignments. Note: Round your intermediate calculations to 2 decimal places and "Percentage" answers to 1 decimal place. Pathfinder % of Total Amount Total Xtreme % of Total Amount Amount Amount Traditional Cost System Amount Total cost assigned to products $ 0 $ 0 $ 0 Pathfinder % of Total Amount Total Amount Xtreme % of Total Amount Amount Amount Activity-Based Costing System Direct costs: Indirect costs: Total cost assigned to products Costs not assigned to products: $ 0 $ 0 $ 0 Total cost $ 0 < Required 2 Required 3 >