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

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:

Required:

1. Compute the product margins for the Xtreme and the Pathfinder products under the companys traditional costing system. (Do not round your intermediate calculations.)

	Xtreme	Pathfinder	Total
Product margin			$0

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				Activity
Activities and Activity Measures	Overhead Cost					Xtreme			Pathfinder			Total
Supporting direct labor (direct labor-hours)	$	767,250				27,300			75,000			102,300
Batch setups (setups)		722,000				210			170			380
Product sustaining (number of products)		670,000				1			1			2
Other		91,350				NA			NA			NA
Total manufacturing overhead cost	$	2,250,600

Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system. (Negative product margins should be indicated with a minus sign. Round your intermediate calculations to 2 decimal places.)

	Xtreme	Pathfinder	Total
Product margin			$0

3. Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Do not round intermediate calculations. Round your "Percentage" answer to 1 decimal place. (i.e. .1234 should be entered as 12.3))

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 DLHs 21,000 units $ $ $ Pathfinder 91.00 51.00 9.00 1.0 DLHs 75,000 units Estimated total manufacturing overhead Estimated total direct labor-hours $2,250,600 102,300 DLHs Xtreme Pathfinder Total % of Total Amount % of Total Amount Amount Amount Amount Traditional Cost System | Direct materials Direct labor Manufacturing overhead Total cost assigned to products $ 0 0 Xtreme Pathfinder Total % of Total Amount % of Total Amount Amount Amount Amount Activity-Based Costing System Direct costs: Indirect costs: Total cost assigned to products $ 0 $ 0 $ 0 Costs not assigned to products: Total cost