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: H1-Tek Manufacturing Inc. Income Statement Sales $1,695,400 Cost of goods sold 1,214,976 Gross margin 480, 424 Selling and administrative expenses 590,000 Net operating loss $(189,576) Hi-Tek produced and sold 60,200 units of B300 at a price of $20 per unit and 12,600 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: Direct materials Direct labor Manufacturing overhead Cost of goods sold B300 T500 Total $ 400,300 $ 162,900 $ 563,200 $ 120,800 $ 42,600 163, 400 488, 376 $1,214,976 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 $100,000 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: Manufacturing Activity Activity Cost Pool (and Activity Measure) Overhead B300 T500 Total Machining (machine-hours) $ 202,356 90,800 62,500 153,300 124,320 76 220 296 Product-sustaining (number of products) 101,400 Other (organization-sustaining costs) 60,300 NA Total manufacturing overhead cost $ 488,376 1 1 NA 2 NA Required: uisuvucu un company > HHHVILI UCHU wivu OLLIVILES AS SHIUVVII UCIU. 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 $ 202,356 124,320 101,400 60,300 $ 488,376 Activity B300 T500 Total 90,800 62,500 153,300 76 220 296 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. 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.) B300 Total Product margin T500 Required 1 Required 3 > B300 T500 Total % of % of Amount Amount Amount % % % % Traditional Cost System Direct materials Direct labor Manufacturing overhead Total cost assigned to products Selling and administrative Total cost % % $ 0 $ 0 $ 0 $ 0 B300 T500 Total % of Amount % of Total Amount Total Amount Amount Amount % % % % % % Activity-Based Costing System Direct costs: Direct materials Direct labor Advertising expense Indirect costs: Machining Setups Product sustaining Total cost assigned to products Costs not assigned to products: Product sustaining Selling and administrative Total cost % % % % % $ 0 $ 0 0 $ 0