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

	Xtreme	Pathfinder
Selling price per unit	$ 115.00		$ 84.00
Direct materials per unit	$ 65.50		$ 54.00
Direct labor per unit	$ 13.60		$ 8.00
Direct labor-hours per unit	1.7	DLHs	1.0	DLH
Estimated annual production and sales	33,000	units	61,000	units

The company has a traditional costing system that applies manufacturing overhead 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	$ 1,756,500
Estimated total direct labor-hours	117,100	DLHs

Required:

1. Compute the product margins for Xtreme and Pathfinder under the companys 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)	Estimated Overhead Cost	Expected Activity
Xtreme	Pathfinder	Total
Supporting direct labor (direct labor-hours)	$ 526,950	56,100	61,000	117,100
Batch setups (setups)	790,000	440	350	790
Product sustaining (number of products)	400,000	1	1	2
Other	39,550	NA	NA	NA
Total manufacturing overhead cost	$ 1,756,500

Compute the product margins for Xtreme and Pathfinder under the activity-based costing system.

3. Prepare a quantitative comparison of the traditional and activity-based cost assignments.

Smoky Mountain Corporation makes two types of hiking boots-Xtreme and Pathfinder. Data concerning these two product lines appear below: The company has a traditional costing system that applies manufacturing overhead 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 Xtreme and Pathfinder 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): Compute the product margins for Xtreme and Pathfinder under the activity-based costing system. 3. Prepare a quantitative comparison of the traditional and activity-based cost assignments. Complete this question by entering your answers in the tabs below. Compute the product margins for Xtreme and Pathfinder under the company's traditional costing system. Note: Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount. Prepare a quantitative comparison of the traditional and activity-based cost assignments. Note: Round your intermediate calculations to 2 decimal places and "Percentage" answers to 1 decimal place Required 2 Required 3> Complete this question by entering your answers in the tabs below. Compute the product margins Xtreme and Pathfinder under the activity-based costing system. Note: Round your intermediate calculations to 2 decimal places