Sales Hi-Tek Manufacturing, Incorporated, 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 Incorporated Income Statement $ 1,716,000 Coat of goods sold 1,251, 116 Gross margin 464,884 Selling and administrative expenses 560,000 Net operating loss $ (95,116) Hi-Tek produced and sold 60,400 units of 300 at a price of $20 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: 2300 1500 Direct materials $ 400,200 $ 162,200 $ 562,400 Direct labor $ 120,700 163,400 Manufacturing overhead 525, 316 Cost of goods sold $ 1,251, 116 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $51,000 and $107,000 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 below. Total $ 42,700 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 $ 210,036 154,880 100,400 60,000 $ 525, 316 B300 90,000 72 1 NA Activity 7500 62,200 280 1 NA Total 152,200 352 2 NA Required: 1. Compute the product margins for the B300 and T500 under the company's traditional costing system, 2. Compute the product margins for B300 and T500 under the activity-based costing system. The company has created an activity-based costing system to evaluate the profitability of its products. Hi- team concluded that $51,000 and $107.000 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 als distributed the company's manufacturing overhead to four activities as shown below: 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 $ 210,036 154,880 100,400 60,000 $ 525,316 13300 90,000 72 1 NA Activity T500 62,200 280 1 NA Total 152,200 352 2 NA Required: 1. Compute the product margins for the B300 and T500 under the company's traditional costing system. 2. Compute the product margins for B300 and T500 under the activity based costing system 3. Prepare a quantitative comparison of the traditional and activity-based cost assignments. Complete this question by entering your answers in the tabs below. 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 Required 1 Required 2 $ 120, 700 $ 42,700 Direct labor Manufacturing overhead Cost of goods sold 163, 400 525, 316 $ 1,251,116 The company has created an activity based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $51,000 and $107,000 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 below: Activity Control and Activity Measure) Machining machine-hours) Setups (netup hours) Product-sustaining number of products) Other organization-staining costa) Total manufacturing overhead cout Manufacturing Overhead $.210,036 154,880 100,400 60,000 $ 525,316 300 90,000 72 1 NA Activity 1500 62,200 280 1 NA Total 152,200 352 2 NA Required: 1. Compute the product margins for the B300 and T500 under the company's traditional costing system 2. Compute the product margins for B300 and T500 under the activity-based costing system. 3. Prepare a quantitative comparison of the traditional and activity-based cost assignments. Complete this question by entering your answers in the tabs below. Required 1 Required Required 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.) 3300 T500 Total Product margin B300 T500 % of % of Total Amount Amount Amount Traditional Cost System Total cost assigned to products Total cost 2300 T500 % of Total Amount % of Total Amount Total Amount Amount Amount Activity-Based Costing System Direct costs: Indirect costs: Total cost assigned to products Costs not assigned to products: Total cost assigned to products Total cost T500 B300 Total Amount % of Total Amount % of Total Amount Amount Amount Activity-Based Costing System Direct costs Indirect costs. Total cost assigned to products Costs not assigned to products: Total cost