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: 147 points $ Hi-Tek Manufacturing Inc. Income statenent Salas Cost of goods sold Gross margin Selline and administrative expenses Net operating loss 1,691,500 1,211,556 479,944 BOOK $ (170,056) Reference Hi-Tek produced and sold 60.200 units of B300 at a price of $20 per unit and 12.500 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: 5400,400 $ 120,500 1500 162,200 2,200 Direct materials Direct labor Manufacturing overhead Cost of goods sold $ Totall 562,600 1 ,700 686, 256 $ 1,211,556 The company has created an activity based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $54,000 and $103.000 of the company's advertising expenses could be directly traced to $300 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: B300 90,100 Activity T500 62,700 200 Total 152,800 276 Manufacturing Overhead $ 209,336 115,920 100,400 60, 600 $ 486,256 Activity Cost Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) Product -sustaining (number of products) Other (organization-sustaining costs) Total manufacturing overhead cost NA NA 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