Hi-Tek Manufacturing Inc. makes two types of industrial component partsthe B300 and the T500. An absorption costing income statement for the most recent period is shown below:

Problem 6-16 Comparing Traditional and Activity-Based Product Margins LO6-1, LO6-3, LO6-4, LO6-51 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 ncome Statemen Sales 706,000 Cost of goods sold 241,338 Gross margin 464,662 Selling and administrative expenses 560,000 95,338 Net operating loss Hi-Tek produced and sold 60,100 units of B300 at a price of $20 per unit and 12,600 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 Total Direct materials 400,800 S 162,200 563,000 120,100 S 42,900 Direct labo 163,000 Manufacturing overhead 515,338 241,338 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 S50,000 and $101,000 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: Manufacturing Activity Cost Pool (and Activity Measure) Overhead B300 T500 Machining (machine-hours) S 205,288 90,300 62,900 153,200 Setups (setup hours) 149,650 75 290 365 100,200 Product sustaining (number of products) Other (organization-sustaining costs) 60,200 NA NA 515,338 Total manufacturing overhead cost Required 1. Compute the product margins for the B300 and T500 under the company's traditional costing system. (Do not round your overhead rate. Round your other intermediate and final answers to the nearest hole number.)