apter 5 Home 1 Saved 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 3 Income Statement Sales nts: Cost of goods sold Gross margin Selling and administrative expenses eBook Net operating loss Hint Print eferences $1,691,400 1,217,504 473,896 560,000 $ (86,104) Hi-Tek produced and sold 60,000 units of 8300 at a price of $20 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: Direct materials Direct labor Manufacturing overhead Cost of goods sold 8300 $ 400,600 $ 162,700 $ 120,200 $ 42,400 T500 Total $ 563,300 162,600 491,604 $ 1,217,504 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation i team concluded that $51,000 and $110,000 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) Other (organization-sustaining costs) Total manufacturing overhead cost Manufacturing Overhead $201,564 128,040 101, 2001 60,800 $ 491,604 8300 90,000 Activity 1500 Total 62,700 152,700. 71 220 291 1 1 2 NA NA NA