Required:

1. Compute the product margins for the Xtreme and the Pathfinder products under the companys 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			Expected Activity
Activities and Activity Measures				Xtreme	Pathfinder	Total
Supporting direct labor (direct labor-hours)	$	629,920		28,600	73,000	101,600
Batch setups (setups)		768,000		260	220	480
Product sustaining (number of products)		710,000		1	1	2
Other		25,680		NA	NA	NA
Total manufacturing overhead cost	$	2,133,600

Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system.