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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 $ 1,701,300 Cost of goods sold 1,217, 940 Gross margin 483,360 Selling and administrative expenses 630,000 Net operating 106 $ (146,640) Hi-Tek produced and sold 60,300 units of B300 at a price of $20 per unit and 12,700 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: Direct materials Direct labor Manufacturing overhead Cost of goods sold B300 T500 Total $ 400,200 $ 162,100 $ 562,300 $ 120,000 $ 42,800 162,800 492,840 $1,217,940 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $56,000 and $106,000 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 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 $ 209,440 121,800 101,600 60,000 $ 492,840 Activity B300 T500 Total 91,000 63,000 154.000 70 220 290 1 1 2 NA NA 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 > Complete this question by entering your answers in the tabs below. Required 1 Requred 2 Required 3 Compute the product margins for B300 and T500 under the activity-based costing system. (Negative product be indicated by a minus sign. Round your intermediate calculations to 2 decimal places.) B300 T500 Total Product margin B300 T500 Total % of % of Amount Amount Amount Traditional Cost System % % % % % % Total cost assigned to products Total cost B300 T500 Total % of % of Total Amount 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

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