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 $ 141.00 $ 91.00 Direct materials per unit $ 64.50 $ 52.00 Direct labor per unit $ 17.00 $ 10.00 Direct labor-hours per unit 1.7 DLHs 1.0 DLHs Estimated annual production and sales 23,000 units 74,000 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 $2,714,400 Estimated total direct labor-hours 113,100 DLHs Required: 1. Compute the product margins for the Xtreme and the Pathfinder products under the companys traditional costing system

product margin xtreme_?pathfinder_?total_?

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 Measures	Overhead Cost		Xtreme	Pathfinder	Total
Supporting direct labor (direct labor-hours)	$	791,700	39,100	74,000	113,100
Batch setups (setups)		1,062,000	340	250	590
Product sustaining (number of products)		790,000	1	1	2
Other		70,700	NA	NA	NA
Total manufacturing overhead cost	$	2,714,400

Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system product margin xtreme_? pathfinder_? total_?

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