ch5_hw_qa1_part1_sh Complete this question by entering your answers in the tabs below.Required 1Required 2Required 3Compute the product margins for the B300 and T500 under the company's traditional costing system. (Round yourintermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.)B300T500TotalProduct margin Hi-Tek Manufacturing, Inc., makes two types of industrial component parts-the B300 and the T500. An absorption costing incomestatement for the most recent period is shown:Hi-Tek Manufacturing Inc.Income Statement$ 1,767,6001,223,118544,482600,000SalesCost of goods soldGross marginSelling and administrative expensesNet operating loss(55,518)Hi-Tek produced and sold 60,400 units of B300 at a price of $21 per unit and 12,800 units of T500 at a price of $39 per unit. Thecompany's traditional cost system allocates manufacturing overhead to products using a plantwide overhead rate and direct labordollars as the allocation base. Additional information relating to the company's two product lines is shown below:B300T500Total$ 400, 300 $ 162,700 $$ 120,500Direct materials563,000162,800497,318$ 1,223,118Direct labor$ 42,300Manufacturing overheadCost of goods soldThe company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementationteam concluded that $53,000 and $108,000 of the company's advertising expenses could be directly traced to B300 and T500,respectively. The remainder of the selling and administrative expenses was organization-sustaining in nature. The ABC team alsodistributed the company's manufacturing overhead to four activities as shown below:ManufacturingActivityActivity Cost Pool (and Activity Measure)Machining (machine-hours)Setups (setup hours)Product-sustaining (number of products)OverheadB300T500Total$ 204,61890,500 62,200152,700131,200101,40060,100$ 497,31880240320112Other (organization-sustaining costs)NANANATotal manufacturing overhead costRequired: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.

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Hi-Tek Manufacturing, Ic., 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 $ 1,767,600 1,223,118 544,482 600,000 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating loss (55,518) Hi-Tek produced and sold 60,400 units of B300 at a price of $21 per unit and 12,800 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: B300 T500 Total Direct materials Direct labor Manufacturing overhead $ 400, 300 $ 162,700 $ $ 120, 500 $ 42,300 563,000 162,800 497,318 $ 1,223, 118 Cost of goods sold 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 $108,000 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 Activity Activity Cost Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) Product-sustaining (number of products) Other (organization-sustaining costs) Overhead B300 T500 Total $ 204,618 90,500 62,200 152,700 131, 200 101,400 60,100 $ 497,318 80 240 320 1. 1 2 NA NA NA Total manufacturing overhead cost 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.