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 StatementSales$1,643,800Cost of goods sold1,234,636Gross margin409,164Selling and administrative expenses580,000Net operating loss$(170,836)

Hi-Tek produced and sold 60,200 units of B300 at a price of $19 per unit and 12,500 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:

B300T500TotalDirect materials$400,700$162,800$563,500Direct labor$120,300$42,400162,700Manufacturing overhead508,436Cost of goods sold$1,234,636

The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $54,000 and $109,000 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

OverheadActivityActivity Cost Pool (and Activity Measure)B300T500TotalMachining (machine-hours)$202,35690,60062,700153,300Setups (setup hours)143,88077250327Product-sustaining (number of products)102,000112Other (organization-sustaining costs)60,200NANANATotal manufacturing overhead cost$508,436

Required:

1. Compute the product margins for the B300 and T500 under the company's traditional costing system.

2. Compute the product margins for B300 and T500 under the activity-based costing system.

3. quantitative comparison of the traditional and activity-based cost assignments.

Manufacturing Activity Activity Cost Pool (and Activity Measure) Overhead B300 T500 Total Machining (machine-hours) $ 202,356 90,600 62,700 153,300 Setups (setup hours) 143,880 77 250 327 Productsustaining (number of products) 102,000 1 1 2 other (organization-sustaining costs) 60,200 NA NA NA Total manufacturing overhead cost $ 508,436 I Required: 1. Compute the product margins for the B300 and T500 under the company's traditional costing system. 2. Compute the product margins for B300 and T500 under the activity-based costing system. 3. Prepare a quantitative comparison of the traditional and activity-based cost assignments. Required: 1. Compute the product margins for the 3300 and T500 under the company's traditional costing system. 2. Compute the product margins for B300 and T500 under the activitybased costing system. 3. Prepare a quantitative comparison of the traditional and activity-based cost assignments. Complete this question by entering your answers in the tabs below. Required 3 Required 1 H Required 2 Compute the product margins for the 5300 and T500 under the company's traditional costing system. (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.) Required: 1. Compute the product margins for the B300 and T500 under the company's traditional costing system. 2. Compute the product margins for B300 and T500 under the activitybased costing system. 3. Prepare a quantitative comparison of the traditional and activity-based cost assignments. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the product margins for B300 and T500 under the activity-based costing system. (Negative product margins should be indicated by a minus sign. Round your intermediate calculations to 2 decimal places.) Required: 1. Compute the product margins for the 3300 and T500 under the company's traditional costing system. 2. Compute the product margins for B300 and T500 under the activity-based costing system. 3. Prepare a quantitative comparison of the traditional and activity-based cost assignments. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations to 2 decimal places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.) Traditional cost System __I__I_ __II_-_ _-II_-_ _-II_-_ :- Total cost assigned to products $ 0 $ 0 0 Total cost 0 B300 T500 Total % of % of Amount Total Amount Amount Total Amount Amount Activity-Based Costing System Direct costs: % % Indirect costs: % % oc 0% % Total cost assigned to products 0 0 0 Costs not assigned to products: Total cost $ 0