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 HE-Tek Manufacturing Inc. Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating loss 5.1.647,800 1,247,138 400,662 560.000 5 (159,338) HiTek produced and sold 60,200 units of 300 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 labor dollars as the allocation base Additional information relating to the company's two product lines is shown below 3300 T500 Total Direct materials $400,500 $ 162,7005 563,500 Direct labor $ 120,700 42,600 163,300 Manufacturing overhead 520,333 cost of goods sold $ 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 $100,000 of the company's advertising expenses could be directly traced to B300 and T500, respectively. The remainder of the seling 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 Control and Activity Measure) Activity Overhead 630 Total Machining (aschine hours) $ 201,021 90,600 62,300 152,900 Setups (setup hours) 200 Product witalning (ruber of products) other formation sustaining costs) 100,600 0.100 Totalfacturing overhead cost $ 520,330 7500 157,010 1 1 NA 367 2 Required: 1 Compute the product margins for the 3300 and T500 under the company's traditional costing system 2. Compute the product margins for 300 and 1500 under the activity based costing system 3. Prepare a quantitative comparison of the traditional and activity based cost assignments 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 3300 T500 Total 90,600 62,388 152,900 77 290 367 1 1 2 MA NA NA Required: 1 Compute the product margins for the B300 and 1500 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 the 8300 and 1500 under the company's traditional costing system(Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.) 3300 T500 Product margin Total $ Required 2 > Prepare a quanutative comparison or the traditional places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole Total T500 B300 % of % of Amount Amount Amount $ 400,800 120,700 162,700 42,600 Traditional Cost System Direct materials Direct labor Manufacturing overhead Total cost assigned to products Selling and administrative Total cost 71.1% $ 73.9% 739% $ 28.99 $ 563,500 26.11% 163,300 26.11% $ 726,800 560,000 $ 1,286,800 $ 521,500 205,300 B300 T500 Total % of % of Amount Total Amount Amount Total Amount Amount $ 400,800 120.700 71.1% 73.9% 162 700 42.600 28.9% $ 26.11% 563,500 163,300 % % 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 Selling and administrative Other Total cost 40 % 119,592 33.110 50,300 724.502 59.31% 21.01% 50.01% 82 236 124,700 19 79.01% 201,828 157,810 100,600 1,187,038 8 50.01% 50.300 462 536 S $ 60,100 $ 1,247,138