The company is considering replacing its traditional costing system with an activitybased 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:
tableEstimated,Expected ActivityActivities and Activity MeasuresOverhead Cost,Xtreme,Pathfinder,TotalSupporting direct labor direct laborhours$Batch setups setupsProduct sustaining number of productsOtherNANANATotal manufacturing overhead cost,$
Compute the product margins for the Xtreme and the Pathfinder products under the activitybased costing system.
Prepare a quantitative comparison of the traditional and activitybased cost assignments.
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