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:

Hi-Tek Manufacturing Inc. Income Statement
Sales	$	1,699,200
Cost of goods sold		1,228,786
Gross margin		470,414
Selling and administrative expenses		590,000
Net operating loss	$	(119,586	)

Hi-Tek produced and sold 60,000 units of B300 at a price of $20per unit and 12,800 units of T500 at a price of $39 per unit. Thecompany’s traditional cost system allocates manufacturing overheadto products using a plantwide overhead rate and direct labordollars as the allocation base. Additional information relating tothe company’s two product lines is shown below:

	B300		T500		Total
Direct materials	$	400,400	$	162,200	$	562,600
Direct labor	$	120,000	$	42,600		162,600
Manufacturing overhead						503,586
Cost of goods sold					$	1,228,786

The company has created an activity-based costing system toevaluate the profitability of its products. Hi-Tek’s ABCimplementation team concluded that $52,000 and $109,000 of thecompany’s advertising expenses could be directly traced to B300 andT500, respectively. The remainder of the selling and administrativeexpenses was organization-sustaining in nature. The ABC team alsodistributed the company’s manufacturing overhead to four activitiesas shown below:

	Manufacturing Overhead			Activity
Activity Cost Pool (and Activity Measure)				B300	T500	Total
Machining (machine-hours)	$	212,106		90,900	62,800	153,700
Setups (setup hours)		130,380		78	240	318
Product-sustaining (number of products)		100,200		1	1	2
Other (organization-sustaining costs)		60,900		NA	NA	NA
Total manufacturing overhead cost	$	503,586

Required:

1. Compute the product margins for the B300 and T500 under thecompany’s traditional costing system.

2. Compute the product margins for B300 and T500 under theactivity-based costing system.

3. Prepare a quantitative comparison of the traditional andactivity-based cost assignments.

Compute the product margins for the B300 and T500 under thecompany’s traditional costing system. (Round your intermediatecalculations to 2 decimal places and final answers to the nearestwhole dollar amount.)

	B300 T500 Total Product margin $0

Compute the product margins for B300 and T500 under theactivity-based costing system. (Negative product margins should beindicated by a minus sign. Round your intermediate calculations to2 decimal places.)

	B300 T500 Total Product margin $0

Prepare a quantitative comparison of the traditional andactivity-based cost assignments. (Round your intermediatecalculations to 2 decimal places and "Percentage" answers to 1decimal place and and other answers to the nearest whole dollaramounts.)

	B300 T500 Total % of % of Amount Amount Amount Traditional Cost System % % % % % % Total cost assigned to products $0 $0 $0 Total cost $0 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 $0 $0 0 Costs not assigned to products: Total cost $0