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: Tek Manufacturing Incorporated Income Statement Sales Cast of goods sold Gross margin Selling and administrative expenses Net operating loss $ 1,759,500 1,225,914 533,586 648,900 $ (186,414) Hi-Tek produced and sold 60,200 units of 8300 at a price of $21 per unit and 12.700 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 Direct materials Direct Tabor Nanufacturing overhead Cost of goods sold 0300 $ 400,500 $ 120,100 1500 $162,100 $ 42,000 Total $562,500 162,100 503,214 $1,225,914 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 $106,000 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 Dverhead, Activity $212,114 127,500 100,00 8300 50,00 88 1500 62,300 Jotal 152,600 210 1 298 60,700 $501,214 NA NA NA 1. Compute the product margins for the B300 and T500 under the company's traditional costing system 2 Compute the product margins for 8300 and T500 under the activity-based costing system 3. Prepare a quantitative comparison of the traditional and activity-based cost assignments