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 Direct materials per unit Xtreme $ 115.00 Pathfinder $ 83.00. $ 65.10 $ 50.00 Direct labor per unit Direct labor-hours per unit Estimated annual production and sales $ 10.00 1.0 DLHS 29,000 units $ 10.00 1.0 DLHS 71,000 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 $ 1,800,000 100,000 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 Estimated Overhead Cost Xtreme Expected Activity Pathfinder Total $520,000 29,000 71,000 100,000 781,000 400 310 710 440,000 1 1 2 59,000 NA NA NA $ 1,800,000 Total manufacturing overhead cost 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.