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	$ 1,766,100
Cost of goods sold	1,215,090
Gross margin	551,010
Selling and administrative expenses	580,000
Net operating loss	$ (28,990)

Hi-Tek produced and sold 60,100 units of B300 at a price of $21 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	$ 400,100	$ 162,400	$ 562,500
Direct labor	$ 120,500	$ 42,400	162,900
Manufacturing overhead			489,690
Cost of goods sold			$ 1,215,090

The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Teks ABC implementation team concluded that $52,000 and $100,000 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)	$ 200,430	90,100	62,900	153,000
Setups (setup hours)	127,160	79	210	289
Product-sustaining (number of products)	101,600	1	1	2
Other (organization-sustaining costs)	60,500	NA	NA	NA
Total manufacturing overhead cost	$ 489,690