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 $ 1,703,200 Cost of goods sold 1,241, 242 Gross margin 461,958 Selling and administrative expenses 610,000 Net operating loss $ (148,042) Hi-Tek produced and sold 60,200 units of 8300 at a price of $20 per unit and 12,800 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: B300 T500 Total Direct materials $ 400,000 $ 162,200 $ 562,200 Direct labor $ 120,500 $ 42,300 162,800 Manufacturing overhead 516,242 Cost of goods sold $1,241, 242 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $59,000 and $101000 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 Activity Cost Pool (and Activity Measure) Overhead B300 T500 Total Machining (machine-hours) $ 202,752 90,700 62,900 153,600 Setups (setup hours) 151,790 73 353 Product-sustaining number of products) 101,600 2 Other (organization-sustaining costs) 60, 100 Total manufacturing overhead cost $ 516,242 1 NA 280 1 NA NA 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 $ 202,752 151,790 101,600 60,100 $ 516,242 Activity B300 T500 Total 90,700 62,900 153,600 73 280 353 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 the B300 and T500 under the company's traditional costing system. (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.) B300 Total Product margin T500 Required Required 2 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 $ 202,752 151,790 101,600 60,100 $ 516,242 Activity B300 T500 Total 90,700 62,900 153,600 73 280 353 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 T500 Total Product margin $ 0 B300 T500 Total % of % of Amount Amount Amount Traditional Cost System % elle % % Total cost assigned to products $ 0 $ 0 Total cost 0 B300 T500 Total % of % of Amount Total Amount Amount Total Amount Amount Activity-Based Costing System Direct costs: % % % % % % Indirect costs: % % % % % % $ 0 $ 0 0 Total cost assigned to products Costs not assigned to products: Total cost $