Rocky Mountain Corporation makes two types of hiking bootsXactive and the Pathbreaker. Data concerning these two product lines appear below:

	Xactive			Pathbreaker
Selling price per unit	$	125.00		$	91.00
Direct materials per unit	$	64.20		$	55.00
Direct labor per unit	$	16.00		$	10.00
Direct labor-hours per unit		1.6	DLHs		1.0	DLHs
Estimated annual production and sales		25,000	units		71,000	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	$2,331,000
Estimated total direct labor-hours	111,000 DLHs

Required:
1.	Compute the product margins for the Xactive and the Pathbreaker products under the companys traditional costing system. (Negative customer margins should be indicated with a minus sign.)

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		Xactive	Pathbreaker	Total
Supporting direct labor (direct labor-hours)	$	888,000	40,000	71,000	111,000
Batch setups (setups)		583,000	310	220	530
Product sustaining (number of products)		780,000	1	1	2
Other		80,000	NA	NA	NA
Total manufacturing overhead cost	$	2,331,000

Compute the product margins for the Xactive and the Pathbreaker products under the activity-based costing system. (Negative customer margins should be indicated with a minus sign. Round your intermediate calculations to 2 decimal places.)

3.	Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Do not round intermediate calculations. Round your percentage answers to one decimal place.)