Hi-Tek Manufacturing Inc. makes two types of industrial component partsthe B300 and the T500. An absorption costing income statement for the most recent period is shown below: Hi-Tek Manufacturing Inc. Income Statement Sales $ 1,709,200 Cost of goods sold 1,218,525 Gross margin 490,675 Selling and administrative expenses 630,000 Net operating loss $ (139,325) Hi-Tek produced and sold 60,500 units of B300 at a price of $20 per unit and 12,800 units of T500 at a price of $39 per unit. The companys 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 companys two product lines is shown below: B300 T500 Total Direct materials $ 400,400 $ 162,000 $ 562,400 Direct labor $ 120,200 $ 42,700 162,900 Manufacturing overhead 493,225 Cost of goods sold $ 1,218,525 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Teks ABC implementation team concluded that $54,000 and $108,000 of the companys 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 companys manufacturing overhead to four activities as shown below: Manufacturing Activity Activity Cost Pool (and Activity Measure) Overhead B300 T500 Total Machining (machine-hours) $ 206,685 90,200 62,900 153,100 Setups (setup hours) 124,740 77 220 297 Product-sustaining (number of products) 101,800 1 1 2 Other (organization-sustaining costs) 60,000 NA NA NA Total manufacturing overhead cost $ 493,225 Required 1. Compute the product margins for the B300 and T500 under the companys traditional costing system. (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole dollars.) 2. 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.) Prepare a quantitative comparison of the traditional and activity-based cost assignments.