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 $ 1,760,000 Cost of goods sold 1,236, 452 Selling and administrative experipes Net operating loss $ (116,452) Sales Gross margin 523,548 640,000 HI-Tek produced and sold 60,000 units of B300 at a price of $21 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: B300 T500 Total Direct materials $ 400,700 $ 162,800 $ 563,500 $ 120,900 $ 42,200 163, 100 Manufacturing overhead 509,852 Cost of goods sold $1,236,452 Direct labor aces 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 $101,000 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 Activity Cost Pool and Activity Measure) Activity Overhead B300 T500 Total Machining machine-hours) $ 200,692 90,600 62,600 153,200 Setups (setup hours) 148,260 73 280 353 Product -sustaining number of products) 100, 200 Other (organization-sustaining costs) 60,700 NA NA Total manufacturing overhead cost $509,852 1 1 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