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 Xtreme Pathfinder $121.00 $ 91.00 Direct materials per unit $ 63.70 $ 56.00 Direct labor per unit $ 8.80 $ 8.00 Direct labor-hours per unit Estimated annual production and sales 1.1 DLHS 26,000 units 1.0 DLHS 73,000 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 $ 2,133,600 Estimated total direct labor-hours 101,600 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 28,600 73,000 $ 629,920 768,000 710,000 Total 101,600 260 220 1 1 480 2 25,680 NA NA NA $ 2,133,600 Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system.