1 Hi-Tek Manufacturing, Inc., makes two types of industrial component parts-the B300 and the T500. An absorption costing income statement for the most recent period is shown: ints 04:31:02 References Hi-Tek Manufacturing Inc. Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating loss. Hi-Tek produced and sold 60,400 units of B300 at a price of $20 per unit and 12,500 units of T500 at a price of $40 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: Direct materials. Direct labor Manufacturing overhead Cost of goods sold $ 1,708,000 1,213,520 494,480 630,000 $ (135,520) B300 T500 $ 400,200 $ 162,300 $ $ 120,500 $ 42,500 Activity Cost Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $52,000 and $104,000 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: Product-sustaining (number of products) Other (organization-sustaining costs) Total 562,500 163,000 488,020 $ 1,213,520 Manufacturing Overhead $ 199,160 127,260 101,000 60,600 Activity T500 B300 90,600 62,600 73 230 1 1 Total 153,200 303 2

Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations to 2 dec places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.) 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. 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.) \begin{tabular}{|c|c|c|c|c|c|c|} \hline \multirow{2}{*}{ Activity-Based Costing System } & \multirow[b]{2}{*}{ Amount } & \multicolumn{2}{|l|}{% of } & \multirow{3}{*}{ Amount } & % of & \multirow[b]{2}{*}{ Amount } \\ \hline & & Total Amount & & & Total Amount & \\ \hline & & & & & & \\ \hline \multirow[t]{4}{*}{ Direct costs: } & & + & & & & \\ \hline & & & % & & % & \\ \hline & & & % & & % & \\ \hline & & & % & & % & \\ \hline \multicolumn{7}{|l|}{ Indirect costs: } \\ \hline & & & % & & % & \\ \hline & & & % & & % & \\ \hline & & & % & & % & \\ \hline Total cost assigned to products & 5 & & & $ & & 0 \\ \hline \multicolumn{7}{|l|}{ Costs not assigned to products: } \\ \hline & & & & & & \\ \hline & & & & & & \\ \hline Total cost & & & & & & $ \\ \hline \end{tabular} Required 2 Roguireds 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. 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.) Hi-Tek Manufacturing, Inc, 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 produced and sold 60,400 units of B300 at a price of $20 per unit and 12,500 units of T500 at a price of $40 per unit. The company's traditional cost system allocates manufacturing overhead to products using a plantwide overhead rate and direct labor dollars os the allocation base. Additional information relating to the company's two product lines is shown below: The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $52,000 and $104,000 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