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 1,701,200 Sales Cost of goods sold 1,232,164 Gross margin 9,036 Selling and administrative expenses 620,000 (150,964) Net operating loss Hi-Tek produced and sold 60,100 units of B300 at a price of $20 per unit and 12,800 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: Total B300 T500 400,500 162,400 562,900 Direct materials 120,600 42,300 Direct labor 162,900 506,364 Manufacturing overhead 1,232,164 Cost of goods sold 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 $108,000 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 Activity Cost Pool (and Activity Measure) Overhead B300 T500 Total 207,944 90,900 62,000 152,900 Machining (machine-hours) 137,720 Setups (setup hours) 73 240 313 100,400 Product-sustaining (number of products) Other (organization-sustaining costs) NA NA NA 60,300 506,364 Total manufacturing overhead cost