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 Manufacturing Inc Income Statement 1,768,000 Sales Cost of goods sold 1,222,427 Gross margin 545,573 600,000 Selling and administrative expenses (54,427) Net operating loss Hi-Tek produced and sold 60,000 units of B300 at a price of $21 per unit and 12,700 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 labor dollars as the allocation base. Additional information relating to the company's two product lines is shown below B300 T500 Total Direct materials 400,800 162,000 562,800 120,900 42,500 163,400 Direct labor Manufacturing overhead 496,227 Cost of goods sold 1,222,427 The company has created an activity-based costing system to evaluate the profitability of its products. Hi Tek's ABC implementation team concluded that $55,000 and $109,000 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