Hi-Tek Manufacturing, Incorporated, makes two types of Industrial component parts-the B300 and the T500 An absorption co

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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 Monutacturing Incorporated Income statement Sales $ 1,644,800 Cost of goods sold 1,235,819 Gross margin 408,981 Selling and administrative expenses 570,000 Net operating loss $ (161,019) Hi-Tek produced and sold 60,500 units of B300 at a price of $19 per unit and 12.700 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: 3300 S 400,300 $ 120, 800 T500 $ 163,000 $ 42,300 Direct materials Direct labor Manufacturing overhead Cost of goods sold Total $ 563,300 163, 100 509,419 $ 1,235,819 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $50,000 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: Activity Cost Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) Product-sustaining number of products) Manufacturing Overhead $ 209,199 139, 920 100.200 B300 90,400 78 1 Activity T500 62,300 240 1 Total 152,700 318 2
The company has created an activity based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $50,000 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) Overhead 3300 T500 Machining (machine-hours) $ 209,199 90,400 62,300 152,700 Setups (setup hours) 139,920 78 240 Product-sustaining number of products) 100, 200 1 other (organization-sustaining costs) 60,100 Total manufacturing overhead cost $ 509,419 Total 1 NA 318 2 NA NA 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the product margins for the B300 and T500 under the company's traditional costing system. (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.) B300 T500 Total
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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the product margins for the B300 and T500 under the company's traditional costing system. (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.) B300 T500 Total Product margin Required Required 2 >
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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 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.) B300 T500 Total Product margin < Required 1 Required 3 >
8300 T500 % of % of Total Amount Amount Amount Traditional Cost System Total cost assigned to products Total cost B300 T500 Total Amount % of Total Amount % of Total Amount Amount Amount Activity-Based Costing System Direct costs: Indirect costs:
Total cost assigned to products Total cost B300 T500 Total Amount % of Total Amount Amount % of Total Amount Amount Activity-Based Costing System Direct costs: Indirect costs: Total cost assigned to products Costs not assigned to products: Total cost