GHA-6 1PT-16) tpx-0.6770426587208941 1530808731823 Problem 7-16 Comparing Traditional and Activity-Based Product Margins LO7-1, LO7-3, LO7-4, LO7-5] Hi-Tek Manufacturing Inc makes two types of industrial component parts-the 8300 and the T500 Atn absorption costing income statement for the most recent period is shown below Hi-Tek Manufacturing Inc Sales Cost of goods sold 1,708,000 1,217001 Gross margin Seling and administrative expenses 490,999 630,000 Net operating loss S (139,001) Hi-Tek produced and sold 60,200 units of B300 at a price of $20 per unit and 12,600 units of T500 at a price of $40 per unt. The company's traditional cost system alocates manufacturing overhead to products using a plantwide overhead rate and direct labor dolars as the allocation base. Additional infoemation relating to the company's two product ines is shown below Direct materials Direct labor Manufacturing overhead S 400,700 $ 162200 $ 562,900 120,100 42,100 162,200 91,901 Cost of goods sold 1,217,00 The company has created an activity based costing system to evaluale the prottability of its products H Tek's ABC implementation team concluded that $57,000 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 was organization-sustaining in nature The ABC team also distributed the company's manufacturing overhead to four activities as shown below