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Problem 7-17 Comparing Traditional and Activity-Based Product Margins [LO7-1, LO7-3, LO7-4, LO7-5) Smoky Mountain Corporation makes two types of hiking boots-the Xtreme and the Pathfinder Data concerning these two product lines appear below: Fathunder $ 91.00 Selling price per unit Direct materiale per unit Direct labor per unit Direct laber-hours per unit Estimated annual production and wales $126.00 63.20 $31.70 1.3 DLHE 21,000 units $ 9.00 2.0 DLHS 75,000 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 Estimated total direct labor-hours $2,250, 600 102,300 DLHS 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): Activities and activity Measures Supporting direct labor direct labor-hours Batch setups (setupa) Product sustaining number of products) Other Total manufacturing overhead cost Eatinated Expected Activity Overhead Cost Xereme Pathfinder Total $ 767, 250 27,300 15,000 102.300 722.000 210 170 380 670,000 91,350 NA NA $ 2.250, 600 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. Complete this question by entering your answers in the tabs below