Required

1. Compute the product margins for the B300 and T500 under the companys traditional costing system. (Do not round your overhead rate. Round your other intermediate and final answers to the nearest whole number.)

2. 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.)

3. Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Do not round your overhead rate. Round your other intermediate calculations and final answers to the nearest whole number. Round your "Percentage" answer to 1 decimal place. (i.e. .1234 should be entered as 12.3))

3. Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Do not round your overhead rate. Round your other intermediate calculations and final answers to the nearest whole number. Round your "Percentage" answer to 1 decimal place. (i.e. .1234 should be entered as 12.3))

Hi-Tek Manufacturing Inc. makes two types of industrial component parts the B300 and the T500. An absorpton costing income statement or the most recent perid is shown below Hi-Tek Manufacturing Inc Income Statement S Cast of goods sold Gross margin Selling and administrative expenses Net opsralig loss 1,642,900 1,245 304 397,598 570,000 172 404 Hi Tek produced and sold 60 400 units of B300 et pnce of $19 per unit and 12 700 units of T500 a pnce of $39 per unit The company's traditional cost system allocates manufacturng overhead to products us ng plan rate and direct labor dollars as the allocation base. Additional information relating to the company's two product lines is shown below vide overhead T500 Tolal Direct materials Direct labcr Manufacluring overhead Cost of goods sold 5 400 400 S 162,700 563,100 163,400 518,804 45,304 s120,900 S 42500 The company has created n activily-based cosling systerri to evaluate the profilebility of its products. Hi-Tek's ABC irriplerientation team concluded thal $59,000 and $100,000 of the company's advertising expenses vould 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 below Marnufacturing Activity Cost Pool (and Activity Measure) Machining (machine-hours) Setups(selup hours) Product sustaining (number of products) Other (omanization-sustaining costs) Tolal manufacturing overheed cost B300 T500 S 207,264 90,100 62,300 152 400 357 149,940 101,600 60,000 518 804 200 NA NA NA