3 Hi-Tek Manufacturing, Inc., makes two types of Industrial component parts-the B300 and the T500. An absorption costing income statement for the most recent period is shown 6.66 points 2012:01 Hi-Tek Manufacturing Inc. Incone Statement Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating loss $ 1,714,000 1,212,990 501,010 640,000 $ (138,990) Book Hi-Tek produced and sold 60,300 units of 8300 at a price of $20 per unit and 12,700 units of T500 at a price of $40 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: B300 T500 Total Direct materials $ 400,700 $ 162,500 $ 563,200 Direct labor $ 120,100 $ 42,400 162,50 Manufacturing overhead 487290 Cost of goods sold $1,212,990 Print References The company has created an activity based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $54,000 and $104,000 of the company's advertising expenses could be directly traced to B300 and T500. 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 (and Activity Measure) Overhead T500 Total Machining (machine-hours) $ 205,690 90,700 62,800 153,500 Setups (setup hours) 121,200 73 230 303 Product -sustaining number of products) 300,000 1 2 other organization-sustaining costs) NA NA Total manufacturing overhead cost $ 487,290 NA Required: 1. Compute the product margins for the B300 and 1500 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. Required 1 Required 2 Required 3 Compute the product margins for the B300 and T500 under the company's traditional costing system. (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.) B300 T500 Total Product margin $ 0 Required Required 2 > Required 1 Required 2 Required 3 Compute the product margins for B300 and T500 under the activity-based costing system. (Negative product margins should be indicated by a minus sign. Round your intermediate calculations to 2 decimal places.) B300 T500 Total $ o Product margin Required 1 Required 2 Required 3 Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations to 2 decimal places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.) B300 T500 Total % of % of Amount Amount Amount Traditional Cost System % % % % % % $ 0 Total cost assigned to products $ 0 $ 0 $ Total cost 0 B300 T500 Total % of % of Total Amount Amount Total Amount Amount Amount Activity-Based Costing System Direct costs: % % % % % % Indirect costs % % % % % % $ 0 $ 0 0 Total cost assigned to products Costs not assigned to products: $ 0 Total cost