PROBLEM 7-17 Comparing Traditional and Activity-Based Product Margins 07-L07-3, 1107-4 107-5 Smoky Mountain Cerpen makes two types of biking both Xtreme and the Pind Detector les appear Xentre Pune Selling price per $140.00 $99.00 Direct mails per 72.00 $55.00 Direct labore $24.00 Duet abbons per 20 DLH 1. DIE Estimated products and a 20.000 30.000 $12.00 The company has a total costing systems in which manufacturing overheadsed to directores De Coming vechead and direct laborhoors for the below Estimated to manufactured $1.000 Estimated to direct labore 120.000 DE Required: 1. Uning shit 7-13 a compute the products for the Past the traditional casting. 2. The company is coming relational content and contato manufacturing ved to the following cost pe the other colonies die capacity to Activities and Activity Meer Sporting director (diretor Batchups Cup Products of product Expected Act Es Owend Cow Puthier Tel $703.600 10 000 80.000 120,000 495.000 200 Dod 600,400 Appund lounds based on direct labor hours. Data concerning manufacturing overhead and direct labor hours for the upcoming year appear below Estimated total manufacturing overhead $1,980,000 Estimated total direct labor hours 120,000 DLH. Required: 1. Using Exhibit 7-13 as a guide, 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): Activities and Activity Measures) Supporting direct labor (direct laborhours) Batch setups (setups) Product sustaining (number of products) Other Total manufacturing overhead cost Estimated Expected Activity Overhead Cost Xtreme Pathfinder Total $ 783,600 40,000 80,000 120,000 495,000 200 100 300 602,400 1 2 99,000 NA NA NA $1,980,000 1 Using Exhibit 7-11 as a guide, compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system 3. Using Exhibit 7-14 as a guide, prepare a quantitative comparison of the traditional and activity-based cost assignments. Explain why the traditional and activity based cost assignments differ