The problem to be answered is attached below.

Rocky Mountain Corporation makes two types of hiking boots Xactive and the Pathbreaker. Data concerning these two product lines appear below: Xactive Pathbreaker Selling Price per unit $ 127.00 $ 89.00 Direct materials per unit $ 64.80 $ 51.00 Direct labor per unit $ 18.20 $ 13.00 Direct laborhours per unit 1.4 DLHs 1.0 DLHs Estimated annual production and sales25,000 units 75,000 units The company has a traditional costing system in which manufacturing overhead is applied to units based on direct laborhours. Data concerning manufacturing overhead and direct labor hours for the upcoming year appear below: Estimated total manufacturing overhead............................. $2,200,000.00 Estimated total direct laborhours....................................... 110,000 DLHs 1.) Using the Exhibit 712 as a guide, compute the product margins for the Xactive and the Pathbreaker 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 organizationsustaining costs and idle capacity costs): Activity and Activity Measures Supporting direct labor (direct laborhours) Batch setups (setups) Product sustaining (number of products) Other Total manufacturing overhead cost Expected Activity Estimated Overhead Cost Xactive Pathbreaker Total $ 797,500.00 35,000.00 75,000.00 110,000.00 $ 680,000.00 250.00 150.00 400.00 $ 650,000.00 1.00 1.00 2.00 $ 72,500.00 NA NA NA $ 2,200,000.00 Using Exhibit 710 as a guide, compute the product margins for the Xactive and the Pathbreaker products under the activitybased costing system