Hi-Tek Manufacturing Inc. makes two types of industrialcomponent parts—the B300 and the T500. An absorption costing incomestatement for the most recent period is shown below: Hi-TekManufacturing Inc. Income Statement Sales $ 1,770,500 Cost of goodssold 1,225,588 Gross margin 544,912 Selling and administrativeexpenses 610,000 Net operating loss $ (65,088) Hi-Tek produced andsold 60,500 units of B300 at a price of $21 per unit and 12,500units of T500 at a price of $40 per unit. The company’s traditionalcost system allocates manufacturing overhead to products using aplantwide overhead rate and direct labor dollars as the allocationbase. Additional information relating to the company’s two productlines is shown below: B300 T500 Total Direct materials $ 400,300 $162,900 $ 563,200 Direct labor $ 120,700 $ 42,500 163,200Manufacturing overhead 499,188 Cost of goods sold $ 1,225,588 Thecompany has created an activity-based costing system to evaluatethe profitability of its products. Hi-Tek’s ABC implementation teamconcluded that $50,000 and $102,000 of the company’s advertisingexpenses could be directly traced to B300 and T500, respectively.The remainder of the selling and administrative expenses wasorganization-sustaining in nature. The ABC team also distributedthe company’s manufacturing overhead to four activities as shownbelow: Manufacturing Activity Activity Cost Pool (and ActivityMeasure) Overhead B300 T500 Total Machining (machine-hours) $204,288 90,600 63,000 153,600 Setups (setup hours) 134,200 75 230305 Product-sustaining (number of products) 100,400 1 1 2 Other(organization-sustaining costs) 60,300 NA NA NA Total manufacturingoverhead cost $ 499,188 Required 1. Compute the product margins forthe B300 and T500 under the company’s traditional costing system.(Do not round your overhead rate. Round your other intermediate andfinal answers to the nearest whole number.) 2. Compute the productmargins 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 traditional andactivity-based cost assignments. (Do not round your overhead rate.Round your other intermediate calculations and final answers to thenearest whole number. Round your "Percentage" answer to 1 decimalplace. (i.e. .1234 should be entered as 12.3))