Problem 7-17 Comparing Traditional and Activity-Based Product Margins [LO7-1, LO7-3, LO7-4, LO7-5] 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 $ 132.00 $ 64.60 $ 9.60 1.2 DLHS 24,000 units $ $ $ Pathfinder 94.00 53.00 8.00 1. O DLHs 70,000 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 tot al manufacturing overhead Estimated tot al direct labor-hours 2,470,000 98, 800 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): Estimated Overhead Cost $ 642, 200 915, 000 840,000 72, 800 $ 2, 470,000 Expected Activity Xtreme Pathfinder Total 2 8, 800 70, 000 98, 800 350 260 610 Activities and Activity Measures Supporting direct labor (direct labor-hours) Batch setups (set ups) Product sustaining (number of products) Other Tot al manufacturing overhead cost NA NA Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system. 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. Required 1 Required 2 Required 3 Compute the product margins for the Xtreme and the Pathfinder products under the company's traditional costing system. (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.) Xtreme Pathfinder Total Product margin Required 1 Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system. (Round your intermediate calculations to 2 decimal places.) Xtreme Pathfinder Total Product margin Required i 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 Amount Traditional Cost System Total cost assigned to products $ $ 0 $ 0 Total Xtreme % of Amount Total Amount Pathfinder - % of Amount Total Amount Amount Activity-Based Costing System Direct costs: Indirect costs: $ Total cost assigned to products Costs not assigned to products: Total cost $ 0 Required 2 Require