ACC 255 CH 7-Practice Smokey Mountain Corp makes two types of hiking boots: the Xtreme and Pathfinder. For the current year, they had the following information: Xtreme Pathfinder Selling price $140 $99 Totals Units sold 20,000 80,000 100,000 Direct labor hours 40,000 80,000 120,000 Direct materials $1,440,000 $4,240,000 $5,680,000 Direct labor $480,000 $960,000 $1,440,000 Manufacturing overhead $1,980,000 The company has been using a traditional costing system with a plantwide overhead rate based on direct labor hours. They are creating an activity-based system and have developed the following cost pools and drivers Activity by Product Cost pools Cost drivers Overhead Xtreme Pathfinder Total Supporting direct labor Dir labor hours $783,600 40,000 80,000 120,000 Batch Setups # of Setups 495,000 200 100 300 Product-sustaining # of products 602,400 1 1 2 Other Unallocated 99,000 N/A N/A N/A Total manufacturing overhead $1,980,000 Instructions: a) Using the traditional costing system, calculate the predetermined overhead rate b) Also using the traditional costing system, calculate the product margins