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 5 1,695,500 Cost of goods sold 1,222,880 Gross margin 472,620 Selling and administrative expenses 630,000 Net operating loss $ (157,380) Hi-Tek produced and sold 60,400 units of 8300 at a price of $20 per unit and 12,500 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: B300 7500 Total Direct materials $ 401,000 $ 162,900 $ 563,900 Direct labor $ 120,500 5 42,900 163,400 Manufacturing overhead 495,580 Cost of goods sold $ 1,222,880 5 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 $105,000 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. Manufacturing Activity Activity Cost Pool (and Activity Measure) Overhead 3300 T500 Total Machining (machine-hours) $ 207,400 90,300 62,200 152,500 Setups (setup hours) 126,280 77 210 287 Product-sustaining (number of products) 101,400 1 1 2 Other (organization-sustaining costs) 60,500 NA NA Total manufacturing overbead cost $ 495,580 NA 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 Overhead $ 207,400 126,280 101,400 60,500 $ 495,580 B300 90,300 77 1 NA Tota 152,5 2 T500 62,200 210 1 NA equired: Compute the product margins for the B300 and T500 under the company's traditional costing system. Compute the product margins for B300 and T500 under the activity-based costing system. - 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 intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.) B300 T500 Total Product margin Required 1 Required 2 > 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. 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 $ 0 (Required 1 Required 3 > Vie Amount Amount Traditional Cost System Direct materials Direct labor Manufacturing overhead Total cost assigned to products Selling and administrative Total cost $ 0 $ $ 0 $ 0 B300 T500 Total Amount % of Total Amount % of Total Amount Amount Amount 5 Activity-Based Costing System Direct costs Direct materials Direct labor Advertising expense Indirect costs: Machining Setups Product sustaining Total cost assigned to products Costs not assigned to products: Selling and administrative Other $ $ 0 0