please help me with this question!

Thank you very much

Managerial Accounting PROBLEM 7-16 Comparing Traditional and Activity-Based Product Margins L07-1, L07-3, L07-4, LO7-5 Hi-Tek Manufacturing, Inc., makes two types of industrial component parts--the B.300 and the T500. An absorption costing income statement for the most recent period is shown: Hi-Tek Manufacturing Inc. Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating loss $2,100,000 1,600,000 500,000 550.000 $ (50,000 Hi-Tek produced and sold 70,000 units of B300 at a price of $20 per unit and 17.500 units of T500 at a price of $40 per unit. The company's traditional cost system allocates manufacturing over- head 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: Direct materials Direct labor Manufacturing overhead Cost of goods sold B300 T500 Total S436,300 $251,700 $ 688,000 $200,000 $104,000 304,000 608.000 $1,600,000 The company has created an activity-based costing system to evaluate the profitability of its prod- ucts. Hi-Tek's ABC implementation team concluded that $50,000 and $100,000 of the company's 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 company's manufacturing overhead to four activities as shown: Additional information relating to the company's two product lines is shown below: Direct materials. Direct labor Manufacturing overhead Cost of goods sold B300 T500 Total $436,300 $251.700 $ 688,000 $200,000 $104.000 304,000 608.000 $1,600,000 The company has created an activity-based costing system to evaluate the profitability of its prod- ucts. Hi-Tek's ABC implementation team concluded that $50,000 and $100,000 of the company's 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 company's manufacturing overhead to four activities as shown: Activity Cost Pool (and Activity Measure) Machining (machine-hours). Setups (setup hours) ..... Product-sustaining (number of products) Other (organization-sustaining costs) Total manufacturing overhead cost... Manufacturing Overhead $213,500 157.500 120,000 117,000 $608,000 Activity B300 T500 Total 90,000 62,500 152,500 75 300 375 1 1 2 NA NA NA Managerial Accounting Required: 1. Using Exhibit 7-13 as a guide, compute the product margins for the B300 and T500 under the company's traditional costing system. 2. Using Exhibit 7-11 as a guide, compute the product margins for B300 and TSCO under the activity-based costing system. 3. Using Exhibit 7-14 as a guide, prepare a quantitative comparison of the traditional and activity-based cost assignments. Explain why the traditional and activity-based cost assign- ments differ