1 H.Tek Manufacturing, Inc., makes two types of Industrial component parts--the 8300 and the T500. An absorption costing income statement for the most recent period is shown Hi-Tek facturing Inc. Income Statement Soles Cost of goods sold Grossmarin Selling and aninistrative expenses et operating loss $ 1,627,500 1,219,262 403,233 630.000 5 (221,762) DO H-Tek produced and sold 60,000 units of B300 at a pnce or $19 per unit and 12,500 units of T500 at a price of $39 per unit. The company's traditional cost system allocates manufacturing overhead to products using a plantwide overhead rate and direct labor dollars as the allocation base. Additional information relating to the company's two product lines is shown below 300 1500 Total Direct materials $ 400,900 162,600 5 563,500 Direct labor $ 120,200 42.000 162,230 Manufacturing overhead 4932 Cost of goods sold 5.1,219,262 The company has created an activity based costing system to evaluate the profitabuty of its products HiTeks ABC implementation team concluded that $58,000 and $107000 of the company's advertising expenses could be directly traced to 1300 and 500 respectively. The remainder of the selling and administrative expenses was organization sustaining in nature. The ABC team also distributed the company's manufacturing overhead to four activities as shown below Manufacturing Activity Activity Cost Pool Cond Activity Measure) Overhead 300 1500 Total Machining machine hours) $ 202,092 90.200 62.900 153.100 Setups (setup hours) 129,970 2:40 317 Product-sustaining (number of products) 101,200 2 Other (organization-sustaining costs) Total manufacturing overhead cost $493,562 77 1 NA 1 NA Required: 1 Compute the product margins for the B300 and T500 under the company's traditional costing system 2. Compute the product margins for B300 and T500 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