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Smoky Mountain Corporation makes two types of hiking boots--the Xtreme and the Pathfinder. Data concerning these two product lines appear below: Xtreme Selling price per unit $138.00 Direct materials per unit $ 64.40 Direct labor per unit $ 13.50 Direct labor-hours per unit 1.5 DLHS Estimated annual production and sales 22,000 units Pathfinder $ 90.00 $ 51.00 $ 9.00 1.0 DLHS 73,000 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 $2,438,000 106,000 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 (setups) Product sustaining (number of products) Other Total manufacturing overhead cost Estimated Expected Activity Overhead Cost Xtreme Pathfinder Total $ 646,600 33,000 73,000 106,000 969,000 330 240 570 780,000 1 1 2 42,400 NA NA NA $2,438,000 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. Required 1 Required 2 Required 3 Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations to 2 places and "Percentage" answers to 1 decimal place.) Total Xtremo % of Amount Total Amount Pathfinder % of Amount Total Amount Amount Traditional Cost System % % % % % % Total cost assigned to products S 0 $ 0 $ 0 Xtreme Pathfinder Total % of % of Amount Total Amount Amount Total Amount Amount Activity-Based Costing System Direct costs: % % % % Indirect costs % % % % Traditional Cost System % % % % % % Total cost assigned to products $ $ 0 $ 0 Xtremo Pathfinder Total % of Total Amount Amount % of Total Amount Amount Amount Activity-Based Costing System Direct costs: % % % Indirect costs: % % % R** $ 0 $ Total cost assigned to products Costs not assigned to products: 0 $ 0 Total cost $ 0

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