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The company is considering replacing its traditional costing system with an activity-based costing system that...

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Accounting

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):
\table[[,Estimated,Expected Activity],[Activities and (Activity Measures),Overhead Cost,Xtreme,Pathfinder,Total],[Supporting direct labor (direct labor-hours),$642,200,28,800,70,000,98,800],[Batch setups (setups),915,000,350,260,610],[Product sustaining (number of products),840,000,1,2,],[Other,72,800,NA,NA,NA],[Total manufacturing overhead cost,$2,470,000,,,]]
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.
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