Hi-Tek Manufacturing, Incorporated, makes two types of industrial component partsthe B300 and the T500. An absorption costing income statement for the most recent period is shown:

Hi-Tek Manufacturing Incorporated Income Statement Sales $ 1,640,000 Cost of goods sold 1,235,666 Gross margins 404,334 Selling and administrative expenses 630,000 Net operating loss $ (225,666) Hi-Tek produced and sold 60,000 units of B300 at a price of $19 per unit and 12,500 units of T500 at a price of $40 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 $ 400,000 $ 162,500 $ 562,500 Direct labor $ 120,800 $ 42,200 163,000 Manufacturing overhead 510,166 Cost of goods sold $ 1,235,666 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Teks ABC implementation team concluded that $51,000 and $104,000 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: Activity Cost Pool (and Activity Measure) Manufacturing Overhead Activity B300 T500 Total Machining (machine-hours) $ 212,106 90,700 63,000 153,700 Setups (setup hours) 137,760 76 260 336 Product-sustaining (number of products) 100,200 1 1 2 Other (organization-sustaining costs) 60,100 NA NA NA Total manufacturing overhead cost $ 510,166

Required: 1. Compute the product margins for the B300 and T500 under the companys 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.

HI-Tek produced and sold 60,000 units of B300 at a price of $19 per unit and 12,500 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: The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $51,000 and $104,000 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 Required: 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. Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate caiculation places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.)