Comparing Traditional and Activity-Based Product Margins [ LO1, LO3, LO4, LO5] 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 below: Hi-Tek produced and sold 70.000 units of B 300 at a price of $20 per unit and 17.500 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 labour dollars as the allocation base. Additional information relating to the company's two product lines is shown below: The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $50,000 and $100,000 of the company's advertising expenses could be directly traced to B300 and T500, respectively. The remainder of the selling and administrative expenses were organization-sustaining in nature. The ABC team atso distributed the company's manufacturing overhead to four activities as shown below: Requined: 1. Using I Exhibit 7-14 as a guide, compute the product margins for the B300 and T500 under the company's traditional costing system. 2. Using Exhibit 7-12 as a guide, compute the product margins for B300 and T500 under the activity-based costing system. 3. Using [ac Exhibit 715 as a guide, prepare a quantitative comparison of the traditional and activity-based cost assignments. Explain why the traditional and activity-based cost assignments differ