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: Sales Hi-Tek Manufacturing Incorporated Income Statement Cost of goods sold Gross margin Selling and administrative expenses Net operating loss $ 1,716,000 1,238,319 477,681 620,000 $ (142,319) Hi-Tek produced and sold 60,200 units of B300 at a price of $20 per unit and 12,800 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: Total Direct materials Direct labor Manufacturing overhead Cost of goods sold B300 $ 400,900 $ 120,500 T500 $ 162,500 $ 42,500 $ 563,400 163,000 511,919 $ 1,238,319 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $52,000 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: 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 Required: Manufacturing Overhead $ 200,299 149,520 B300 90,300 Activity T500 Total 62,600 76 280 101,600 1 1 152,900 356 2 60,500 NA NA NA $ 511,919 Activity Cost Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) Product-sustaining (number of products) Manufacturing Overhead $ 200,299 149,520 Other (organization-sustaining costs) Total manufacturing overhead cost Activity B300 90,300 T500 62,600 Total 152,900 76 280 356 101,600 1 1 2 60,500 NA NA $ 511,919 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.) Product margin B300 T500 Total $ 0 < Required 1 Required 2 > Activity Cost Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) Product-sustaining (number of products) Manufacturing Overhead $ 200,299 149,520 101,600 Other (organization-sustaining costs) Total manufacturing overhead cost Required: Activity B300 90,300 T500 62,600 Total 152,900 76 280 356 1 1 2 60,500 NA NA $ 511,919 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.) Product margin B300 T500 Total $ < Required 1 Required 3 > Required 1 Required 2 Required 3 Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations to places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.) Traditional Cost System Amount B300 % of Amount T500 % of Total Amount Total cost assigned to products $ 0 $ 0 $ 0 Total cost Activity-Based Costing System Direct costs: Indirect costs: Amount $ 0 B300 T500 % of % of Total Amount Total Total Amount Amount Amount Total cost Activity-Based Costing System Direct costs: Indirect costs: $ 0 B300 % of T500 % of Total Amount Total Total Amount Amount Amount Amount Total cost assigned to products Costs not assigned to products: $ 0 $ 0 0 Total cost $ 0 < Required 2 Required 3 >