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pter 7 Saved Smoky Mountain Corporation makes two types of hiking boots-the Xtreme and the Pathfinder. Data concerning these two product lines appear below xtremePathfinder Selling price per unit Direct materials per unit Direct labor per unit Direct Estimated annual production and sales 80.0 50.00 10.00 $120.00 64.80 $13.00 1.0 DLHs 1.3 DLH 26,000 units Labor-hours per unit 72,000 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 $1,904,400 105, 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) Estinated Expected Activity overhead Cost Xtreme Pathfinder Total Activities and Activity Measures Supporting direct labor (direct labor-hours) Batch setups (setups) Product sustaining (number of products) Other $581,900 33,800 72,000 105,800 650 280 650,000 600, 000 370 NA NA NA $ 1,904, 400 Total manufacturing overhead cost 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