Problem 7-16 Comparing Traditional and Activity-Based Product Margins LO7-1, LO7-3, LO7-4, LO7-5) Hi-Tek Manufacturing, Inc., makes two types of industrial component parts-the B300 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 1,759,280 1,228,460 530,740 580,000 (49,260) Hi-Tek produced and sold 60,000 units of 8300 at a price of $21 per unit and 12,800 units of T500 at a price of $39 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 8300 T5e0 Total Direct materials Direct labor Manufacturing overhead Cost of goods sold 162,000 562,800 162,700 582,960 $ 1,228,460 120,680 42,100