Smoky Mountain Corporation makes two types of hiking boots-the Xtreme and the Pathfinder. Data concerning these two product lines appear below: Xtreme Pathfinder Selling price per unit $120.00 $ 87.00 Direct materials per unit $ 63.60 $ 55.00 Direct labor per unit $ 12.00 $ 10.00 Direct labor-hours per unit 1.2 DLHS 1.0 DLHS Estimated annual production and sales 25,000 units 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 $ 2,040,000 102,000 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 Expected Activity Overhead cost Xtreme Pathfinder Total $ 622,200 30,000 72,000 102,000 644,000 250 210 460 700,000 1 1 2 73,800 NA NA NA $ 2,040,000 Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system. Complete this question by entering your answers in the tabs below. S Required Required Required 1 2 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.) Xtreme Pathfinder Total % of % of Amount Total Total Amount Amount Amount Amount Traditional Cost System Direct materials S 1,590,000 64.0 % 65.0% 3.960,000 Direct labor 300,000 12.0% 720,000 12.0% Product sustaining 600,000 24.0 % 1,440,000 24.0% Total cost assigned to S products 2.490,000 S 0 6,120,000 Xtreme Pathfinder Total % of % of Total Total Amount Amount Amount Amount Amount Activity-Based Costing System Direct costs: Direct materials Direct labor 9 99 Indirect costs: Machining 9 92 Batch setups 99 Product sustaining 99 Total cost assigned to S 0 S 0 products S 0 Costs not assigned to products