- Hi Tek Manufacturing Incorporated Makes Two Types Of Industrial Component Parts The B300 And The T500 An Absorption C 1 (49.01 KiB) Viewed 12 times
Hi-Tek Manufacturing, Incorporated, 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 Incorporated Income
Statement Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating loss Direct materials Direct labor Hi-Tek produced and sold 60,200 units of 8300 at a price of $21 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: Manufacturing overhead Cost of goods sold Activity Cast Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) Product-sustaining (number of products) Other (organization-sustaining costs) Total manufacturing overhead cost $ 1,755,600 1,254,207 The
company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $51,000 and $108,000 of the
company's advertising expenses could be directly traced to 5300 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: Required 1 Required 2 Required 3 581.303 680,000 $ (98,697) Product margin 8300 $ 400,200 $ 120,100 B300 T580 $ 162,000 $ 42,800 Complete this
question by entering your answers in the tabs below. T600 Manufacturing Overhead $288,377 157,528 181,600 60,800 $ 528,297 Total $ 563,100 162,900 528,297 $ 1,254,297 S 90,180 78 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. Total 1 NA Activity 1500 62,000 Compute the product margins for the 8300 and T500 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. 288 1 NA Total 152,180 358 2 NA
Required 1 Required 2 Required 3 Prepare a quantitative comparison of the traditional and activity-based cost assignments. Note: Round your intermediate calculations to 2 decimal places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts. Traditional Cost System Total cost assigned to products Total cost Activity-Based Costing System Direct costs: Indirect costs: Total cost assigned to products Costs not assigned to products: Total cost S S Amount Amount B300 0 B300 % of % of Total Amount $ $ T500 Amount Amount 0 T500 % of % of Total Amount Total Amount Total Amount $ 0 0 0