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 60,100 units of B300 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:

The company has created an activity based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $54,000 and $103,000 of the company's advertising expenses could be directly traved 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:

Required:

1. Compute the product margins for the B300 and the 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.

omework Set Ch 7 i Saved Hi-Tek Manufacturing, Inc., makes two types of Industrial component parts- for the most recent period is shown: Hi-Tek Manufacturing Inc. Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating loss $ 1,693,400 1,211, 402 481,998 580,000 $ (98,002) HI-Tek produced and sold 60,100 units of B300 at a price of $20 per unit and 12,60 traditional cost system allocates manufacturing overhead to products using a planty base. Additional Information relating to the company's two product lines is shown b 3300 $ 400, 100 $ 120, 900 1500 $ 162,500 42. 100 Direct materials Direct Labor Manufacturing overhead Cost of goods sold Total $ 562, 600 163,000 485, 802 $ 1,211 402 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's concluded that $54,000 and $103,000 of the company's advertising expenses could be directly traced to 8300 remainder of the selling and administrative expenses was organization-sustaining in nature. The ABC team also 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 $ 211,002 113,200 101,600 60.000 $ 485, 802 B300 90,000 73 1 NA Activity 7500 Total 62,900 152,900 210 283 1 2 NA NA 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 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.) B300 T500 Total Product margin $ 0 Roured Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the product margins for B300 and 7500 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 0 Traditional Cost System % % % Total cost assigned to products 0 $ Total cost $ 0 B300 T500 Total % of % of Total Amount Amount Total Amount Amount Amount Activity-Based Costing System Direct costs: 9 % delse Indirect costs: % 9 % $ 0 Total cost assigned to products Costs not assigned to products: $ Total cost