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 expenses Net operating loss $ 1,718,eee 1.240,707 477,293 580.ee (102.707) Hi-Tek produced and sold 60,300 units of B300 at a price of $20 per unit and 12,800 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. Direct materials Direct labor Manufacturing overhead Bee T500 Total $ 488,580 $ 162,888 $ 562,500 $ 120,580 $ 42,788 163,200 515,807 $ 1,248,707 Cost of goods sold The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $56,000 and $108,000 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 Overhead $ 283,357 150,750 182,400 60,506 $ 515,007 Activity Cost Pool (and Activity Measure) Machining (nachine-hours) Setups (setup hours) Product-sustaining (number of products) Other (organization-sustaining costs) Total manufacturing overhead cost 8300 90,00 75 1 NA Activity T500 62.100 260 1 NA Total 152,988 335 NA 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 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.) Complete this question by entering your answers in the tabs below. B300 T500 Total Product margin Required 1 Required Required 3 Required 2 > Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations to 2 decimal places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.) Complete this question by entering your answers in the tabs below. B300 T500 Total % of % of Amount Amount Amount Required 1 Required 2 Required Traditional Cost System %. 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.) exi B300 T500 Total Total cost assigned to products Product margin Total cost T500 Total % of % of
