Hi-Tek Manufacturing, Incorporated, 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 Incorporated Income Statement Sales $ 1,640,900 Cost of goods sold Gross margin 1,250,672 390,228 600,000 Selling and administrative expenses Net operating loss $ (209,772) Hi-Tek produced and sold 60,500 units of B300 at a price of $19 per unit and 12,600 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 $ 563,500 Direct materials Direct labor $ 400,700 $ 162,800 $ 120,800 $ 42,800 163,600 523,572 Manufacturing overhead Cost of goods sold $ 1,250,672 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $55,000 and $107,000 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 Overhead Activity T500 B300 Activity Cost Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) Total 152,800 $ 212,392 90,600 62,200 150,780 79 280 359 100, 200 1 1 2 Product-sustaining (number of products) Other (organization-sustaining costs) Total manufacturing overhead cost 60, 200 $ 523,572 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 T500 Total Product margin 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 Traditional Cost System Total cost assigned to products Total cost Activity-Based Costing System Direct costs: Indirect costs: Total cost assigned to products Costs not assigned to products: Total cost Amount Amount B300 B300 % of % of Total Amount Amount Amount T500 T500 % of % of Total Amount Total Amount Total Amount