Saved Problem 7-17 (Algo) Comparing Traditional and Activity-Based Product Margins (LO7-1, LO7-3, LO7-4, LO7-5] Smoky Mountain Corporation makes two types of hiking boots-Xtreme and Pathfinder. Data concerning these two product lines appear below: Xtreme Pathfinder Selling price per unit Direct materials per unit $ 120.00 $ 63.50 $ 92.00 $ 54.00 Direct labor per unit $ 13.50 $ 9.00 Direct labor-hours per unit Estimated annual production and sales 1.5 DLHS 24,000 units 1.0 DLH 71,000 units The company has a traditional costing system that applies manufacturing overhead 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 Required: $ 2,033,000 107,000 DLHS 1. Compute the product margins for Xtreme and Pathfinder 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 Expected Activity Xtreme 36,000 Pathfinder Total 71,000 107,000 240 200 1 1 440 2 NA NA NA Activities and (Activity Measures) Supporting direct labor (direct labor-hours) Batch setups (setups) Product sustaining (number of products) Other Total manufacturing overhead cost $ 663,400 572,000 750,000 47,600 $ 2,033,000 Compute the product margins for Xtreme and Pathfinder 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. Drov 17 of 19