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 Inc. Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating loss $1,768,200 1,239,462 528,738 620,000 $ (91,262) Hi-Tek produced and sold 60,200 units of B300 at a price of $21 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: Direct materials Direct labor Manufacturing 8300 T500 Total $400,500 $162,600 $ 563,100 $120,800 $ 42,400 163,200 overhead Cost of goods sold 513,162 $1,239,462 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 $103,000 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 Cost Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) products) Product-sustaining (number of Other (organization-sustaining costs) Total manufacturing overhead cost Activity 8300 7500 Total 90,700 62,200 152,900 Manufacturing Overhead $211,002 139,860 73 260 333 101,800 1 1 2 60,500 NA NA NA $513,162