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. Incone Statement Sales Cost of foods sold Gross margin Selling and administrative expenses Net operating loss $ 1,714,000 1,253,956 460,046 520,000 $ (109,954) Hi-Tek produced and sold 60,100 units of B300 at a price of $20 per unit and 12.800 units of 1500 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 overhead Cost of goods sold B300 T500 Total $ 401,600 $ 162,700 $ 563,700 $ 120,100 $ 43,000 163, 100 522,154 $ 1,253,954 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 $107.000 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: 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 $107,000 of the company's advertising expenses could be directly traced to B300 and 1500, 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 Measure) Overhead B300 Total Machining machine hours) $207,944 90,600 62,300 152,900 Setup (setup hours) 157,810 Product-sustaining (number of products) 101,000 Other (organization sustaining costs) 60,400 NA NA Total manufacturing overhead cost $ 527,154 T500 77 1 290 1 NA 367 2 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