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 StatementSales$ 1,770,500Cost of goods sold1,222,516Gross margin547,984Selling and administrative expenses600,000Net operating loss$ (52,016)

Hi-Tek produced and sold 60,500 units of B300 at a price of $21 per unit and 12,500 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:

B300T500TotalDirect materials$ 400,500$ 162,100$ 562,600Direct labor$ 120,800$ 42,700163,500Manufacturing overhead496,416Cost of goods sold$ 1,222,516

The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Teks ABC implementation team concluded that $59,000 and $103,000 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 OverheadActivityB300T500TotalMachining (machine-hours)$ 201,69690,20062,600152,800Setups (setup hours)133,32073230303Product-sustaining (number of products)101,000112Other (organization-sustaining costs)60,400NANANATotal manufacturing overhead cost$ 496,416

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