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Hi - Tek Manufacturing, Incorporated, makes two industrial component parts B 3 0 0 and T 5 0 0 . An absorption costing income statement

Hi-Tek Manufacturing, Incorporated, makes two industrial component partsB300 and T500. An absorption costing income statement for the most recent period is shown below:
Hi-Tek Manufacturing, Incorporated
Income Statement
Sales $ 1,649,900
Cost of goods sold 1,229,090
Gross margin 420,810
Selling and administrative expenses 580,000
Net operating loss $ (159,190)
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 $40 per unit. The companys 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 companys two product lines is shown below:
B300 T500 Total
Direct materials $ 400,600 $ 162,300 $ 562,900
Direct labor $ 120,100 $ 42,400162,500
Manufacturing overhead 503,690
Cost of goods sold $ 1,229,090
The company created an activity-based costing system to evaluate the profitability of its products. Hi-Teks ABC implementation team concluded that $53,000 and $110,000 of the companys 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 companys manufacturing overhead to four activities as shown below:
Activity Cost Pool (and Activity Measure) Manufacturing Overhead Activity
B300 T500 Total
Machining (machine-hours) $ 209,61090,60062,400153,000
Setups (setup hours)132,88072230302
Product-sustaining (number of products)100,600112
Other (organization-sustaining costs)60,600 NA NA NA
Total manufacturing overhead cost $ 503,690
Required:
Compute the product margins for B300 and T500 under the companys traditional costing system.
Compute the product margins for B300 and T500 under the activity-based costing system.
Prepare a quantitative comparison of the traditional and activity-based cost assignments.

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