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: i-Tok Manufacturing Incorporated Income Statement Sales $ 1,701,300 Cost of goods sold 1, 226, 984 Gross margin 474,316 selling and administrative expenses 610.000 Net operating loss $ (135,684) Hi-Tek produced and sold 60,300 units of B300 at a price of $20 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 labor Manufacturing overhead Cost of goods sold B300 $ 400,400 $ 120,900 7500 $ 162,200 $ 42,700 Total $ 562,600 163,600 500,784 $ 1,226,984 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $59,000 and $102,000 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 $ 210,864 127,920 101,200 60,800 $ 500,784 B300 90,400 72 1 NA Activity T500 62,400 240 1 NA Total 152,800 312 2 NA Required: 1. Compute the product margins for the 8300 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