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	$ 1,716,000
Cost of goods sold	1,256,688
Gross margin	459,312
Selling and administrative expenses	590,000
Net operating loss	$ (130,688)

Hi-Tek produced and sold 60,200 units of B300 at a price of $20 per unit and 12,800 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	$ 400,500	$ 162,200	$ 562,700
Direct labor	$ 120,900	$ 42,900	163,800
Manufacturing overhead			530,188
Cost of goods sold			$ 1,256,688

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 $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 Overhead	Activity
		B300	T500	Total
Machining (machine-hours)	$ 210,588	90,600	62,000	152,600
Setups (setup hours)	158,400	70	290	360
Product-sustaining (number of products)	100,800	1	1	2
Other (organization-sustaining costs)	60,400	NA	NA	NA
Total manufacturing overhead cost	$ 530,188

Required:

1. Compute the product margins for the B300 and T500 under the companys 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. 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.) Complete this question by entering your answers in the tabs below. 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.) Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.)