Hello! I am struggling to figure out these computations. Your help is appreciated!!!

Hi-Tek Manufacturing, Inc., makes two types of industrial component partsthe B300 and the T500. An absorption costing income statement for the most recent period is shown:

Hi-Tek Manufacturing Inc.

Income Statement

Sales$1,637,200

Cost of goods sold$1,218,505

Gross margin$418,695

Selling and administrative expenses$600,000

Net operating loss $(181,305)

Hi-Tek produced and sold 60,100 units of B300 at a price of $19 per unit and 12,700 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:

B300T500TotalDirect materials$400,600$162,900$563,500Direct labor$120,800$42,900163,700Manufacturing overhead491,305Cost of goods sold$1,218,505

The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $52,000 and $101,000 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:

Activity Cost Pool Manufacturing overhead Activity_B3000 T500 Total

Machine Hours $206,680 90,800 62,300 153,100

Set Up Hours $122,220 71 220 291

Number of products $101,800 1 1 2

Other $60,600 NA NA NA

Total manufacturing Overhead Cost $491, 305

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.