2. 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.)

3.	Prepare a quantitative comparison of the activity-based cost assignments. (Round your intermediate calculations to 2 decimal places and "Percentage" answer to 1 decimal place. (i.e. .1234 should be entered as 12.3) and other answers to nearest whole dollar amounts.)

Hi-Tek Manufacturing Inc. makes two types of industrial component parts-the B300 and the T500. Arn absorption costing income statement for the most recent period is shown below Hi-Tek Manufacturing Indc. Income Statement Sales Cost of goods sold $1,695,400 1,218,467 Gross margin Selling and administrative expenses 476,933 620,000 Net operating loss $ (143,067) Hi-Tek produced and sold 60,200 units of B300 at a price of $20 per unit and 12,600 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 $400,600 162,500 563,100 163,400 491,967 $120,600 42,800 Cost of goods sold $1,218,467 The company has created an activity-based costing system to evaluate the profitability of its products. Hi- Tek's ABC implementation team concluded that $58,000 and $102,000 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