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 Cost of goods sold Gross margin Income Statement Selling and administrative expenses Net operating loss $ 1,706,000 1,260,408 445,592 600,000 $ (154,408) Hi-Tek produced and sold 60,100 units of B300 at a price of $20 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: Direct materials Direct labor Manufacturing overhead Cost of goods sold $ 400,100 $ 120,300 T500 $ 162,000 $ 42,300 Total $ 562,100 162,600 535,708 $ 1,260,408 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 $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: 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 Manufacturing Overhead $ 205,958 167,850 101,600 8300 90,800 Activity T500 62,900 73 300 1 1 Total 153,700 373 2 60,300 NA NA NA $ 535,708 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 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 2 decimal places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.) Amount B300 % of Amount T500 % of Total Amount Traditional Cost System Direct materials Direct labor Manufacturing overhead Total cost assigned to products Machining S 0 $ 0 $ 0 Total cost $ 0 Activity-Based Costing System Direct costs: Direct materials Direct labor Indirect costs: Machining Setups B300 % of Total Amount Amount Amount T500 % of Total Amount Total Amount Product sustaining Total cost assigned to products S 0 $ 0 0 Costs not assigned to products: Other Total cost $ 0 < Required 2 Required 3 >