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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

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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 Ine. Income Statenent $1,640,000 1,234,277 405,723 570,000 (164,277) Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating loss Hi-Tek produced and sold 60,000 units of B300 at a price of $19 per unit and 12,500 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: T500 $ 162,600 $ 42,300 Total B300 Direct materials Direct labor Manufaeturing overhead Cost of goods sold $ 400,600 120,800 563,200 163,100 507,977 $1,234,277 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $51,000 and $102,000 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 Activity Manufacturing Overhead $ 209,747 136,530 101,400 60,300 Activity T500 Total 153,100 333 2 Activity Cost Pool (and Activity Meanure) Machining (nachine- hours ) Setups (eetup hours) Product-sustain ing (number of producte) Other (organization- sustaining costs) Total manufacturing overhead cost B300 90,700 62,400 73 260 1 NA NA NA 507,977 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 3 Required 2 Compute the product margins for the B300 and TS00 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 Total T500 Product margin 0 Required 2 y distributed the company's manufacturing overhead to four activities as shown below: Activity Manufacturing Overhead B300 90,700 62,400 73 Total Activity Cost Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) Product-sustaining (number of products) Other (organization-sustaining costa) T500 $ 209,747 136,530 101,400 60,300 $507,977 153,100 333 260 1 NA NA NA Total manufacturing overhead cost equired: Compute the product margins for the B300 and T500 under the company's traditional costing system. .Compute the product margins for B300 and T500 under the activity-based costing system. 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 B300 and TS00 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 oduct margin Required 1 Required 3 T500 Total 8300 % of % of Amount Amount Amount Traditional Cost System % % % % % % 0 0 Total cost assigned to products 0 Total cost 0 T500 Total B300 % of % of Total Amount Amount Total Amount Amount Amount Activity-Based Costing System Direct costs: % % % Indirect costs: % % % % Prev Next> 2 of 3 Che Total cost assigned to products $ 0 S 0 Total cost Total T500 8300 % of % of Amount Total Amount Amount Total Amount Amount Activity-Based Costing System Direct costs: % % % % % % Indirect costs: % % % % 0 Total cost assigned to products $ 0 0 Costs not assigned to products: Total cost 0 Required 2 Prev 2 of 3 Next

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