Hi$-$Tek Manufacturing, Incorporated, makes two types of industrial component parts$$the B$300$ and the T$500.$ An absorption costing income statement for the most recent period is shown:

Hi$-$Tek Manufacturing Incorporated

Income Statement

Sales $ $1,758,000$

Cost of goods sold $1,243,336$

Gross margin $514,664$

Selling and administrative expenses $640,000$

Net operating loss $ $(125,336)$

Hi$-$Tek produced and sold $60,500$ units of B$300$ at a price of $$21$ per unit and $12,500$ units of T$500$ at a price of $$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:

B$300$ T$500$ Total

Direct materials $ $400,600$ $ $162,400$ $ $563,000$

Direct labor $ $120,700$ $ $42,600163,300$

Manufacturing overhead $517,036$

Cost of goods sold $ $1,243,336$

The company has created an activity$-$based costing system to evaluate the profitability of its products. Hi$-$Tek$$s ABC implementation team concluded that $$51,000$ and $$101,000$ of the company$$s advertising expenses could be directly traced to B$300$ and T$500,$ 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 $($and Activity Measure$)$ Manufacturing Overhead Activity

B$300$ T$500$ Total

Machining $($machine$-$hours$)$ $ $201,69690,50062,300152,800$

Setups $($setup hours$)153,34074300374$

Product$-$sustaining $($number of products$)102,000112$

Other $($organization$-$sustaining costs$)60,000$ NA NA NA

Total manufacturing overhead cost $ $517,036$

Required:

$1.$ Compute the product margins for the B$300$ and T$500$ under the company$$s traditional costing system.

$2.$ Compute the product margins for B$300$ and T$500$ under the activity$-$based costing system.

$3.$ Prepare a quantitative comparison of the traditional and activity$-$based cost assignments. Hi$-$Tek Manufacturing, Incorporated, makes two types of industrial component parts$-$the B$300$ and the T$500.$ An

absorption costing income statement for the most recent period is shown:

$Hi-Te$ produced and sold $60,500$ units of $B300$ at a price of $$21$ per unit and $12,500$ units of T$500$ at a price of $$35$

unit. The company's traditional cost system allocates manufacturing overhead to products using a plantwide overhe

rate and direct labor dollars as the allocation base. Additional information relating to the company's two product lin

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 $$51,000$ and $$101,000$ of the company's advertising expenses could be direct

traced to B$300$ and T$500,$ 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 sho

below:

Required:

Compute the product margins for the B$300$ and T$500$ under the company's traditional costing system.

Compute the product margins for B$300$ and T$500$ under the activity$-$based costing system.

Prepare a quantitative comparison of the traditional and activity$-$based cost assignments.

Complete this question by entering your answers in the tabs below.

Compute the product margins for the B$300$ and T$500$ under the company's traditional

costing system. $($Round your intermediate calculations to $2$ decimal places and final

answers to the nearest whole dollar amount.$)$