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 $ 1,647,800 Cost of goods sold 1,247,138 Gross margin 400,662 Selling and administrative expenses 560,000 Net operating loss $(159,338) Hi-Tek produced and sold 60,200 units of 8300 at a price of $19 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 lobor dollars as the allocation base. Additional information relating to the company's two product lines is shown below: Direct materials Direct labor Manufacturing overhead cont of goods sold 3300 T500 Total $ 400,000 $162,700 $ 563,500 $120,700 $ 42,600 163,300 520,338 $1,247,138 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $56,000 and $103,000 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: Activity Cost Pool (and Activity Measure) Machining machine-hours) Setups (setup hours) Product-sustaining (number of products) Other (organization-sustaining costs) Manufacturing Overhead $ 201,828 157,810 100,600 60, 100 5211 Activity 300 T500 Total 90,600 62,300 152,900 77 290 362 1 1 2 NA NA NA The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $56,000 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) Product -sustaining number of products) Other (organization-sustaining costs) Total manufacturing overhead cost Manufacturing Overhead $ 201,828 157,810 100,600 60,100 $ 520,338 Activity D300 7500 Total 90,600 62,300 152,900 77 290 367 1 1 2 NA NA 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 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. Assessment Tool Frame Required 1 Required 2 Required 3 Compute the product margins for the 8300 and TSOO under the company's traditional costing system. (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.) 8300 T500 Total Product margin Required Required 2 > Activity Cost Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) Product-sustaining number of products) Other (organization-sustaining costs) Total manufacturing overhead cost Overhead $ 201,828 157,810 100,600 60,100 $ 520,338 3300 T500 90,600 62,300 77 290 1 1 NA NA Total 152,900 367 2 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 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 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.) 6300 T500 Product margin Total B300 T500 Total % of % of Amount Amount Amount Traditional Cost System % % % % % % Total cost assigned to products Total cost B300 Total % of Total Amount T500 % of Total Amount Amount Amount Amount Activity-Based Costing System Direct costs % % *** % Indirect costs % % % % * % Total cost assigned to products Costs not assigned to products