HiTek Manufacturing, Incorporated. makes two types ofindustrial component partsthe 3300 and the T500. An absorption costing income statement for the most recent period is shown: Hi-Tek Manufacturing Incorporated Income Statement Sales $ 1,218,000 Cost of goods sold 1,232,740 Gross margin 485,250 Selling and administrative expenses 650,000 Net operating loss $ (104,740) Hi-Tek produced and sold 60,300 units of 3300 at a price of $20 per unit and 12,800 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: 3300 T500 Direct materials $ 400,400 $ 162,700 Direct labor $ 120,200 $ 42,400 Manufacturing overhead Cost of goods sold Total $ 593,199 162,600 592,949 $ 1,232,749 The company has created an activitybased costing system to evaluate the protability of its products. Hi-Tek's A3C implementation team concluded that $53,000 and $103,000 ofthe company's advertising expenses could be directly traced to 3300 and T500, respectively. The remainder of the selling and administrative expenses was organizationsustaining in nature. The ABC team also distributed the company's manufacturing overhead to four activities as shown below: Manufacturing Activit! Activity Cost Pool (and Activity Measure) Overhead Machining [machine-hours) $ 206,820 Setups (setup hours) 140,220 Product-sustaining (number of products) 100,000 Other (organization-sustaining costs} 60,000 Total manufacturing overhead cost 5 5973949 Required: 3300 T500 Total 90,500 52,?00 153,200 22 2?0 342 1 1 2 NA NA NA 1. Compute the product margins for the 3300 and T500 underthe company's traditional costing system. 2. Compute the product margins for 3300 and T500 under the activitybased costing system. 3. Prepare a quantitative comparison oithe traditional and activitybased cost assignments. 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.) B300 T500 Total Product margin $ O Required 1 Required 2 Required 3 Compute the product margins for 3300 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.) Required 1 Required 2 Required 3 Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations to 2 decim. places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.) __ _- -- _- 56 D $ 0 Total cost assigned to products Total cost Activity-Based Costing System Direct costs: -_-_ -_-_ $ 0 D Total cost assigned to products 36 U Costs not assigned to products: Total cost $ [1