Hi-Tek Manufacturing, Incorporated, makes two types of industrial component partsthe 8300 and the T500. An absorption costing income statement for the most recent period is shown: Hi-Tek Manufacturing Incorporated Income Statement Sales $ 1,706,00 Cost of goods sold 1,223, 144 Gross margin 482,856 Selling and administrative expenses 570.000 Net operating loss $ (87,144) Hi-Tek produced and sold 60100 units of 8300 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: B300 T580 Total Direct materia $ 400,000 $ 162,600 $ 562,600 Direct labor $ 120,800 $ 42,400 163,200 Manufacturing overhead 497,344 Cost of goods sold $ 1,223, 144 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $50,000 and $107.000 of the company's advertising expenses could be directly traced to 1300 and 1500, 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 $ 199,644 136,800 100,600 60,300 $ 497,344 3300 90,400 72 1 NA Activity T500 62,000 270 1 NA Total 152,400 342 2 NA distributed the company s manufacturing overnead to tour activities as snown 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 $ 199,644 136,800 100,600 60,300 $ 497,344 B300 90,400 72 1 NA Activity T500 62,000 270 1 NA Total 152,400 342 2 NA 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 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.) T500 Total Product margin B300 distributed the company s manuracturing overnead to tour 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 $ 199,644 136,800 100,600 60,300 $ 497,344 B300 90,400 72 1 NA Activity T500 62,000 270 1 NA Total 152,400 342 2 NA Required: 1. Compute the product margins for the B300 and 1500 under the company's traditional costing system. 2. Compute the product margins for B300 and 1500 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.) B300 T500 Total Product margin $ B300 T500 % of % of Total Amount Amount Amount Traditional Cost System Direct materials Direct labor $ 0 $ $ 0 Total cost assigned to products Manufacturing overhead Total cost $ 0 B300 T500 Total Amount % of Total Amount % of Total Amount Amount Amount Activity-Based Costing System Direct costs: Direct materials Direct labor Indirect costs: $ 0 $ Total cost assigned to products Costs not assigned to products: 0 0 $ $ 0 $ Total cost assigned to products Manufacturing overhead Total cost $ 0 B300 T500 Total Amount % of Total Amount % of Total Amount Amount Amount Activity-Based Costing System Direct costs: Direct materials Direct labor Indirect costs: $ $ 0 0 Total cost assigned to products Costs not assigned to products: Total cost $ 0