Hi-Tek Manufacturing, Inc., makes two types of industrial component parts--the 8300 and the T500. An absorption costing income statement for the most recent period is shown: - Tok Manufacturing Inc. Income Statement Sales Coat of goods sold Gross margin selling and administrative expenses Het operating loss $1,639,100 1,247,586 391,514 630,000 $ (23B, 486) Hi-Tek produced and sold 60,200 units of B300 at a price of $19 per unit and 12,700 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: 3300 7500 Total Direct materials $ 400,900 $ 162,300 $ 563,200 $ 120,900 $ 42,600 163,500 Manufacturing overhead Cont of goods sold 01.247,586 Direct labor 520,086 es The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $57,000 and $104,000 of the company's advertising expenses could be directly traced to 8300 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 Control and Activity Mensure Machining machine-hours) Setupe (sutup hours) Product- staining number of products Other organisation-sustaining costs) Total manufacturing overhead coat Manufacturing Overhead $ 212,106 148,280 100,200 60,300 5520,886 Activity 6300 T500 Total 91.000 62,700 153,700 77 260 337 - 1 1 2 MA MA NA 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 TSOO 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