Hi-Tek Manufacturing Inc. makes two types of industrial component parts-the B300 and the T500. Arn absorption costing income statement for the most recent period is shown below: Hi-Tek Manufacturing Inc. Income Statement Sales Cost of goods sold $1,695,400 1,219,985 Gross margin Selling and administrative expenses 475,415 560,000 Net operating loss $ (84,585) Hi-Tek produced and sold 60,200 units of B300 at a price of $20 per unit and 12,600 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 B300 T500 Total Direct materials Direct labor Manufacturing overhead $400,500 162,800 563,300 163,400 493,285 $120,600 42,800 Cost of goods sold $1,219,985 The company has created an activity-based costing system to evaluate the profitability of its products. Hi- Tek's ABC implementation team concluded that $53,000 and $107,000 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 Manufacturing Overheacd T500 Total Activity Cost Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) Product-sustaining (number of products) Other (organization-sustaining costs) B300 $ 206,685 126,000 100,000 60,600 90,300 62,800 153,100 315 75 240 NA NA NA Total manufacturing overhead cost $ 493,285