Problem $7-16($Algo$)$ Comparing Traditional and Activity$-$Based Product Margins $[$LO$7-1,$ LO$7-3,$ LO$7-4,$ LO$7-5]$

Hi$-$Tek Manufacturing, Incorporated, makes two industrial component parts$-$B$300$ and T$500.$ An absorption costing income statement for the most recent period is shown below:

Hi$-$Tek produced and sold $60,400$ units of B $300$ at a price of $\backslash (\backslash$$ $21\backslash )$ per unit and $12,800$ units of T$500$ at a price of $\backslash (\backslash$$ $40\backslash )$ 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:

The company created an activity$-$based costing system to evaluate the profitability of its products. Hi$-$Tek's ABC implementation team concluded that $\backslash$$$56,000$ and $\backslash$$$106,000$ of the company's advertising expenses could be directly traced to B$300$ and T$500,$ respectively. The remainder of the selling and administrative expenses was organization$-$sustaining in nature. The $\backslash ($ A B C $\backslash )$ team also distributed the company's manufacturing overhead to four activities as shown below:

Required:

$1.$ Compute the product margins for B$300$ and T$500$ under the company's traditional costing system.

$2.$ Compute the product margins for B$300$ and T$500$ 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.

Compute the product margins for B$300$ and T$500$ under the company's traditional costing system.

Note: Round your intermediate calculations to $2$ decimal places and final answers to the nearest whole dollar amount.