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 Cost of goods sold $1,761,900 1,227,908 Gross margin Selling and administrative expenses Net operating loss 533,992 630,000 $ (96,008) Hi-Tek produced and sold 60,500 units of B300 at a price of $21 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: Total Direct materials: Direct labor Manufacturing overhead Cost of goods sold B300 7500 $ 400,700 $ 162,600 $ 120,000 $42,500 $ 563,300 162,500 502,108 $ 1,227,908 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $53,000 and $101,000 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 $ 210,588 130,720 100,600 60,200 B300 90,100 Activity T500 62,500 74 230 1 1 Total 152,600 304 2 NA NA NA $ 502,108 --- Activity Cost Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) Product-sustaining (number of products) Manufacturing Overhead $ 210,588 130,720 Other (organization-sustaining costs) Total manufacturing overhead cost Required: Activity B300 90,100 T500 62,500 74 230 Total 152,600 304 100,600 1 1 2 60,200 NA NA NA $ 502,108 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 $ Required 1 Required 2 > 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 Activity $ 210,588 130,720 B300 90,100 T500 Total 62,500 152,600 74 230 304 100,600 1 1 2 60,200 NA NA NA $ 502,108 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 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 Total Amount % of Total Amount Total Amount Amount Total cost B300 % of Total Amount Amount Amount Activity-Based Costing System Direct costs: Indirect costs: Total cost assigned to products Costs not assigned to products: $ Total cost T500 0 $ % of Total Amount Total Amount $ 0 < Required 2 Required 3