Check my work Problem 7-16 Comparing Traditional and Activity-Based Product Margins [LO7-1, LO7-3, L07-4, LO7-5 5 points 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 eBook Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating loss 1,772,200 1.242,452 Print 529,748 570,00 (40,252) Hi-Tek produced and sold 60,200 units of B300 at a price of $21 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 6300 T500 Total Direct materials Direct labor Manufacturing overhead $ 400,100 162,400 562,500 162,900 517.052 $ 120,600 42,300 Cost of goods sold $ 1,242,452 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $53,000 and $101,000 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: Manufacturing Activit 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 Overhead $ 207,672 148,680 100,200 60, 500 $ 517,052 B300 T500 Total 90,600 62,100 152,700 280 354 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 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.) 300 T500 Total Product margin Required 1Required 2 Required 3 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.) B300 T500 Total Product margin Required 1 Required 2 Required 3 Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations to 2 decimal places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.) B300 T500 Total %of %of Amount Amount Amount Traditional Cost System Total cost assigned to products Total cost B300 T500 Total 96 of %of Amount Total AmountAmount Total AmountAmount B300 T500 Total %of %of Amount Total Amount Amount Total Amount Amount Activity-Based Costing System Direct costs Indirect costs Total cost assigned to products Costs not assigned to products Total cost