i-Tex Manufacturing Ine Sales Cost of goods sold Gross margin Selling and administrative expenses570,000 Net operating loss 1.774,300 1.225,550 548,75 $(21,250) Hi-Tek produced and sold 60,300 units of 8300 at a price of $21 per unit and 12,700 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 T500Total Direct materials Direct labor Manufacturing overhead Cost of goods sold $ 400,100 $162,600 $ 562,700 163,200 499-650 1,225,550 $ 120.900 42.300 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $60,000 and $107,000 of the company's advertising expenses could be directly traced to 8300 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 Overhead Activit B300 T50OTota tivity Cont Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) Product-sustaining (number of products) Other (organization-sustaining costs) Total manufacturing overhead cost 211,14090,400 62, 600 153,000 311 127,510 100,800 71 240 60,200NANA 499, 650 NA Required: 1. Compute the product margins for the 8300 and T500 under the company's traditional costing system. 2. Compute the product margins for 8300 and T500 under the activity-based costing system. 3. Prepare a quantitative comparison of the traditional and activity-based cost assignments