Hi-Tek Manufacturing, Incorporated, makes two types of industrial component partsthe B300 and the T500. An absorption costing income statement for the most recent period is shown:

Hi-Tek Manufacturing Incorporated Income Statement
Sales	$ 1,706,000
Cost of goods sold	1,244,056
Gross margin	461,944
Selling and administrative expenses	560,000
Net operating loss	$ (98,056)

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 companys 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 companys two product lines is shown below:

	B300	T500	Total
Direct materials	$ 400,200	$ 162,200	$ 562,400
Direct labor	$ 120,400	$ 42,800	163,200
Manufacturing overhead			518,456
Cost of goods sold			$ 1,244,056

The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Teks ABC implementation team concluded that $54,000 and $105,000 of the companys 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 companys manufacturing overhead to four activities as shown below:

Activity Cost Pool (and Activity Measure)	Manufacturing Overhead	Activity
		B300	T500	Total
Machining (machine-hours)	$ 199,906	90,100	62,500	152,600
Setups (setup hours)	157,950	71	280	351
Product-sustaining (number of products)	100,400	1	1	2
Other (organization-sustaining costs)	60,200	NA	NA	NA
Total manufacturing overhead cost	$ 518,456

Required:

1. Compute the product margins for the B300 and T500 under the companys traditional costing system.

Compute the product margins for the B300 and T500 under the companys traditional costing system. (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.)

	B300	T500	Total
Product margin	$298,911	$163,032	$461,943

2. Compute the product margins for B300 and T500 under the activity-based costing system.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.)

	B300	T500	Total
Product margin			$0

3. Prepare a quantitative comparison of the traditional and activity-based cost assignments.

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.)

	B300		T500		Total Amount
		% of		% of
	Amount		Amount
Traditional Cost System
Direct materials
Direct labor
Manufacturing overhead
Total cost assigned to products	$0		$0		$0
Selling and administrative
Total cost					$0
	B300		T500		Total Amount
		% of		% of
	Amount	Total Amount	Amount	Total Amount
Activity-Based Costing System
Direct costs:
Direct materials
Direct labor
Advertising expense
Indirect costs:
Machining
Setups
Product sustaining
Total cost assigned to products	$0		$0		0
Costs not assigned to products:
Other
Total cost					$0