Smoky Mountain Corporation makes two types of hiking bootsthe Xtreme and the Pathfinder. Data concerning these two product lines appear below:

	Extreme	Pathfinder
Selling price per unit	$140.00	$99.00
Direct materials per unit	$72.00	$53.00
Direct labor per unit	$24.00	$12.00
Direct labor hours per unit	2.0 DLHs	1.0 DLHs
Estimated annual production and sales	20,000 units	80,000 units

Required:

1. Using Exhibit 7-13 as a guide, compute the product margins for the Xtreme and the Pathfinder products under the company's traditional costing system.