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 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 Manufacturing Inc. Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses560,000 Net operating loss $ 1-774,500 1,237,938 536, 562 $ (23,438) Hi-Tek produced and sold 60,500 units of B300 at a price of $21 per unit and 12,600 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 B300TS0OTotal Direct materials Direct labor Manufacturing overhead Cost of goods sold 400,500 162,200 562,700 s 120,600 42,000 162,600 512,638 $ 1,237,938 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 $110,000 of the company's advertising expenses could be directly traced to 8300 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) Machining (machine-houra) Setups (setup houra) Product-sustaining (number of producta) Other (organization-sustaining coste) Total manufacturing overhead cost OverheadB300 500 Total $ 208, 78890,300 62,100 152,400 75 141,750 101,800 240 315 60,300NA NA NA 512,638 Required: 1. Compute the product margins for the B300 and T500 under the company's traditional costing system. 2. Compute the product margins for 8300 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. 3 Manufacturing overhead Cost of goods sold 512,638 $ 1,237,938 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 $110,000 of the company's advertising expenses could be directly traced to B300 and TS00, 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: points Nanufacturing Activity tivity Cont. Fool (and Activity Measure) Machining (machine-hours, Setups (setup houra) Produet-euntaining (number of products) Other (organization-sustaining costs) Total manufacturing overhead cost Overhead B300 TSOOIl total $ 208,788 90,300 62,100 152,400 75 141,750 101,800 60,300 $ 512,638 240 315 Print NA NA References 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 comparlson 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 Tsoo tinder the activity-based costing system. (Negative product margins should be indicated by a minus sign. Round your intermediate calculations to 2 decimal places.) Product margin Required, Required 3 3 Required 1 Required 2 Required 3 Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations to 2 decim places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.) ints %of %of eBook Tradtional Cost System Print Total cost assigned to products Total cost B300 %of %of Amount Total Amount Amount Total Amount Amount Activity Based Costing System Direct costs: Indirect costs: Total oost assigned to products Costs not assigned to products: Total cost C Required 2 KPrev 3 of 3 EE Next