Hi-Tek Manufacturing, Incorporated, makes two industrial component parts0300 and T500. An absorption costing income statement for the most recent period is shown below: HiTek Manufacturing, Incorporated Income Statement Sales $ 1,645,900 Cost of goods sold 1,256,435 Gross margin 389,465 Selling and administrative expenses 560,000 Net operating loss $ (170,535) Hi-Tek produced and sold 60,100 units of B300 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 $ 400,900 $ 162,700 $ 563,600 Direct labor $ 120,500 $ 42,300 162,900 Manufacturing overhead 529,935 Cost of goods sold $ 1,256,435 The company created an activity-based costing system to evaluate the protability of its products. Hi-Tek's ABC implementation team concluded that $55,000 and $108,000 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 Activity Cost Pool (and Activity Measure) Overhead 5300 T500 Total Machining (machinehours) $ 206,955 90,600 62,700 153,300 Setups (setup hours) 161,680 76 300 376 Productsustaining (number of products) 100,600 1 1 2 Other (organizationsustaining costs) 60,700 NA NA NA Total manufacturing overhead cost $ 529,935 Required: 1. Compute the product margins for B300 and T500 under the company's traditional costing system. 2. Compute the product margins for 8300 and T500 under the activity-based costing system. 3. Prepare a quantitative comparison of the traditional and activity-based cost assignments. Required 1 Required 2 Required 3 Compute the product margins for B300 and T500 under the company's traditional costing system. Note: Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount. Required 1 Required 2 Required 3 Compute the product margins for B300 and T500 under the activity-based costing system. Note: Negative product margins should be indicated by a minus sign. Round your intermediate calculations to 2 decimal places. B300 T500 % of % of Total Amount Amount Total Amount Total Amount Amount Traditional Cost System Total cost assigned to products $ 0 $ 0 $ 0 Total cost $ 0 B300 T500 % of % of Total Amount Total Total Amount Amount Amount Amount Activity-Based Costing System Direct costs: Indirect costs: Total cost assigned to products $ 0 $ 0 0 Costs not assigned to products: Total cost 0