Problem 7-17 Comparing Traditional and Activity-Based Product Margins (L07-1, LO7-3, LO7-4, L07-5] Smoky Mountain Corporation makes two types of hiking boots-the Xtreme and the Pathfinder. Data concerning these two product 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 $ 141.00 $ 64.50 $ 17.00 1.7 DLHS 23,000 units Pathfinder $ 91.00 $ 52.00 $ 10.00 1.0 DLHS 74,000 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 Estimated total direct labor-hours $ 2,714,400 113,100 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): Activities and Activity Measures Supporting direct labor (direct labor-hours) Batch setups (setups ) Product sustaining (number of products) Other Total manufacturing overhead cost Estimated Overhead Cost $ 791,700 1,062,000 790,000 70, 700 $ 2,714,400 Expected Activity Xtreme Pathfinder Total 39,100 74,000 113,100 340 250 590 1 2 NA NA NA 1 Compute the product margins for the Xtreme and the Pathfinder products 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations to 2 decimal places and "Percentage" answers to 1 decimal place.) Total Xtreme - % of Amount Total Amount Pathfinder % of Amount Total Amount T % Amount $ Traditional Cost System Direct materials Direct labor Manufacturing overhead Total cost assigned to products 1,483,500 391,000 $ 1,874,500 0 Total Xtreme % of Amount Total Amount Pathfinder % of Amount Total Amount Amount Activity-Based Costing System Direct costs: Indirect costs