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

	Xtreme			Pathfinder
Selling price per unit	$	132.00		$	94.00
Direct materials per unit	$	64.60		$	53.00
Direct labor per unit	$	9.60		$	8.00
Direct labor-hours per unit		1.2	DLHs		1.0	DLHs
Estimated annual production and sales		24,000	units		70,000	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	$2,470,000
Estimated total direct labor-hours	98,800 DLHs

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 Measures	Overhead Cost		Xtreme	Pathfinder	Total
Supporting direct labor (direct labor-hours)	$	642,200	28,800	70,000	98,800
Batch setups (setups)		915,000	350	260	610
Product sustaining (number of products)		840,000	1	1	2
Other		72,800	NA	NA	NA
Total manufacturing overhead cost	$	2,470,000
Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system Prepare a quantitative comparison of the traditional and activity-based cost assignments.