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: 15 Dois HI-Tek Manufacturing Inc. Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating loss $ 1,639,000 1, 231,016 487,984 560,00 $ (152,016) BOON Print Hi-Tek produced and sold 60,400 units of 8300 at a price of $19 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 inbor 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 8300 T500 Total $ 400,000 $162,100 $ 562.100 $ 120,700 42,100 162.80 526 116 $1,231,016 The company has created on activity based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $53,000 and $105,000 of the company's advertising expenses could be directly traced to 1300 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 1 Activity Cost Pool and Activity Measure) Machining (machine-hours) Setups (setup hours) Product-sustaining (number of products) Other (organization-sustaining costs) Total manufacturing overhead cost Manufacturing Overhead $ 211, 416 133,200 100,800 60,700 $ 506,116 Activity B300 T500 Total 90,500 62,700 153,200 76 220 296 1 1 2 NA NA NA 15 points ook Required: 1. Compute the product margins for the 8300 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 Tsco under the company's traditional costing system. (Round your Intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount.) 3300 T500 Total Product margin Required 2 > 1 Activity Cost Pool (and Activity Measure) Machining machine-hours) Setups (setup hours) Product-sustaining (number of products) Other (organization-sustaining costs) Total manufacturing overhead cost Manufacturing Overhead $ 211, 416 133,200 100,800 60,700 $ 506,116 Activity T500 Total 90,500 62,700 153,200 76 220 296 1 1 2 NA NA NA 15 points Hint Required: 1. Compute the product margins for the B300 and 1500 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. heferences Complete this question by entering your answers in the tabs below. Required Required 2 Required 3 Compute the product margins for B300 and TSOO 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 1 Amount Total Amount Amount Total Amount Amount Activity-Based Costing System Direct costs: % % 15 points % % % % eBook Indirect costs % X % % % % References Total cost assigned to products Costs not assigned to products: Total cost