Chapter 7 H Help Sav Problem 7.16 Comparing Traditional and Activity-Based Product Margins [L07-1, LO7-3, LO74, LO75] Hi-Tek Manufacturing, Inc., makes two types of industrial component parts-the 8300 and the T500. An absorption costing income statement for the most recent period is shown: 214 s1,703,300 ,209,730 Cost of goods sold 560.000 Set operating loss Hi-Tek produced and sold 60,400 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: $ 400,200 162,200 562,400 163,200 484,130 s 1,209,730 Direet labor s120,700 42,500 Cost of goods sold The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC n team concluded that $55,000 and $104,000 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: 8