ACC'lZDO 901 Fall 2022 Maria X 9 Question 1 - TEST CH 7,8 - C X t Course Hero X a: Course Hero in eztomheducationcom 7 .. re ' MyDrive-Googl YouTube 9 Maps Canvas E Other Bookmarks TEST CH 7,8 0 Saved Hi-Tek Manufacturing, Incorporated, makes two types of industrial component partsthe B300 and the T500. An absorption costing income statement for the most recent period is shown: HiTek Manufacturing Incorporated 3333 Income Statement points Sales 5 1,710,000 Cost of goods sold 1,224,921 Gross margin 485,079 gawk Selling and administrative expenses 550,000 Net operating loss 3 (64,921) Hint Hi-Tek produced and sold 60,100 units of 8300 at a price of $20 per unit and 12,700 units ofT500 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: References 3300 T500 Total Direct materials $ 400,100 $ 162,400 $ 562,500 Direct labor $ 120,600 $ 42,700 153,300 Manufacturing Overhead 499,121 Cost of goods sold 5 1,224,921 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $55,000 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: Manufacturing Activitx Activity Cost Pool (and Activity Measure) overhead E300 T500 Total Machining (machinehours) s 204,421 90,900 62,800 153,700 Setups {setup hours) 132,300 75 240 315 Productsustaining (number of products) 101,600 1 1 2 % Prev 1 of 3 Next > Help Save 8. Exit Submit . . ACC'iZDO 901 Fail 2022 Mana X 9 Question 1 - TEST CH 7,8 - C X t Course Hero a Course Hero 6 C' in eztomheducationcom . w i, ' Gmail ' MyDrive-Google YouTube 9 Maps Canvas E OtherBookmarks 1 33.33 polnis eBook Hint References TEST CH 7,8 0 Saved Help Save 8. Exit Submit The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $55,000 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 organizationvsustaining in nature. The ABC team also distributed the company's manufacturing overhead to four activities as shown below: Manufacturing $ Activity Cost Pool (and Activity Measure) Overhead asoo T500 Total Machining (machinehours) S 204,421 90,900 62,800 153,700 Setups {setup hours) 132,300 75 240 315 Productsustaining (number of products) 101,600 1 1 2 other (organizationsustaining costs) 60,500 NA NA NA Total manufacturing overhead cost $ 499,121 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 E 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.) 5300 T500 Total Product margin