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 Direct labor per unit. Direct labor-hours per unit Estimated annual production and sales Xtreme $126.00 $63.20 $ 11.70 1.3 DIS 21,000 units Pathfinder $91.00 $ 51.00 $ 9.00 1.0 LIES 75,000 units The company has a traditional costing system in which manufacturing overhead is applied to unlts 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 $2,250,600 102,300 DLES 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): Estimated Expected Activity Activities and activity Manares Overhead cont Xtreme Pathfinder Total Supporting direct labor (direct labor-hours) 767,250 27,300 75,000 102,300 Batch setups (setups) 722,000 Product wantaining (number of producto) 670,000 1 Other 91,350 Total manufacturing overhead cost $2,250,600 $ 170 210 1 NA 380 2 NA NA 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