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 Pathfinder $91.00 $ 52.00 $10.00 Xtreme $141.00 Direct materials per unit $ 64.50 Direct labor per unit. Direct labor-hours per unit Estimated annual production and sales $ 17.00 1.7 DLHS 23,000 units 1.0 DLHS 74,000 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 $ 2,714,400 113,100 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 Overhead Cost $ 791,700 Expected Activity Xtreme Pathfinder Total 39,100 74,000 340 250 1 1 113,100 590 2 70,700 NA NA NA $ 2,714,400 1,062,000 790,000 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.