Chec 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: Hi-Tek Manufacturing Inc. Income Statement Sales $ 1,693,480 Cost of goods sold 1,234,816 Gross margin 458,584 Selling and administrative expenses 650,000 Net operating loss $ (191,416) Hi-Tek produced and sold 60,100 units of B300 at a price of $20 per unit and 12,600 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: B300 T500 Total Direct materials $ 400,800 $ 162,400 $ 563,200 $ 120,300 $ 42,500 162,800 Manufacturing overhead 508,816 Cost of goods sold $ 1,234,816 Direct labor The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $55,000 and $105,000 of the company's advertising expenses could be directly traced to B300 and 1500, 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 B300 T500 Total Machining (machine-hours) $ 204,216 90,200 62,200 152,400 Setups (setup hours) 143,000 75 250 325 Product -sustaining (number of products) 101,200 1 Other (organization-sustaining costs) 60,400 NA NA Total manufacturing overhead cost $ 508,816 1 2 NA 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: Hi-Tek Manufacturing Inc. Income Statement Sales $ 1,693,400 Cost of goods sold 1,234,816 Gross margin 458,584 Selling and administrative expenses 650, eee Net operating loss $ (191, 416) Hi-Tek produced and sold 60,100 units of 8300 at a price of $20 per unit and 12,600 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: B300 T500 Total Direct materials $ 400,800 $ 162,400 $ 563,200 Direct labor $ 120,300 $ 42,500 162,800 Manufacturing overhead 588,816 Cost of goods sold $ 1,234,816 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $55,000 and $105,000 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 B300 T500 Total Machining (machine-hours) $ 284,216 90,200 62,200 152,480 Setups (setup hours) 143,000 Product-sustaining (number of products) 101,200 1 Other (organization-sustaining costs) Total manufacturing overhead cost $ 508,816 75 250 1 NA 325 2 NA 60,400 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. ces Required 1 Required 2 Required 3 Compute the product margins for the B300 and 1500 under the company's traditional costing system. (Round intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.) B300 T500 Total Product margin $ 0 Required 2 > B300 T500 Total % of % of Amount Amount Amount Traditional Cost System % % % % % % Total cost assigned to products $ 0 $ 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: B300 T500 Total % of % of Amount Total Amount Amount Total Amount Amount Activity-Based Costing System Direct costs % % % % % % Indirect costs: % % % % % $ $ 0 0 Total cost assigned to products Costs not assigned to products: Total cost $ 0