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: Hi-Tek Manufacturing Ine. Income Statement Sales $ 1,640,900 Cost of goods sold 1,223,490 Gross margin 417,410 Selling and administrative expenses 550,000 Net operating loss $ (132,590) Hi-Tek produced and sold 60,500 units of B300 at a price of $19 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: 1300 T500 Total Direct materials $ 400,600 $ 162,000 $ 562,600 Direct labor $ 120,500 $ 42,100 162,600 Manufacturing overhead 498,290 Cost of goods sola $1,223,490 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $50,000 and $105,000 of the company's advertising expenses could be directly traced to 1300 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 Activity Cost Pool (and Activity Mensure) Overhead 3300 T500 Total Machining (machine-hours) $ 203,490 90,900 62,100 153,000 Setups (setup hours 133.300 70 240 310