Answered step by step
Verified Expert Solution
Question
...
1 Approved Answer
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
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 Hetek Manufacturing Inc. Income Statement Sales 5 1,635,200 Cost of goods sold 1.215,032 Gross sargin 520,168 Selling and administrative expenses 570.000 Net operating loss 5 (149,832) H-Tek produced and sold 60,200 units of 8300 at a price of S19 per unit and 12.600 units of T500 at a price of 539 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 3.500 T500 Total 5.400.00 162,500 5 562,900 $ 120,000 42.900 16,00 418,332 $ 1,215,032 The company has created an activity-based costing system to evaluate the profitability of its products Hi-Teks ABC implementation team concluded that 556,000 and $108,000 of the companys advertising expenses could be directly traced to 8300 and 1500 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 Beasure) Machining machine hours) Setups (setup hours) Product-sustaining number of products) Other (organization sustaining costs) Total manufacturing overhead cost Manufacturing Overhead $ 202,692 124,740 100,400 60,500 $ 485, 332 Activity 8300 T500 Total 90.200 62,200 152,400 77 220 297 1 1 2 NA 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 1500 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 Wollar amount) B300 T500 Total Product margin HiTek 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: Hotel Manufacturing Inc Income Statement Sales $ 1,635, 200 Cost of goods sold 1.215,03 Gross margin 420,168 Selling and administrative expenses 570,000 Niet operating loss 5 (149,032) HiTek produced and sold 60 200 units of B300 at a price of $19 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 dollats as the allocation base. Additional information relating to the company's two product lines is shown below 5300 T500 Total Direct materials $400.00 $ 162,300 $ 562,900 Direct lobor $ 120,000 $42.000 163,000 Hanufacturing overhead 400 Cost of sold $1,225.022 The company has created an activity based costing system to evaluate the profitability of its products Hi-Teks ABC implementation team concluded that $56,000 and 5108 000 of the company's advertising expenses could be directly traced to 300 and 1500 respectively the remainder or the selling and administrative experses 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 $ 202,692 124,740 100,400 60.500 $ 488,332 Activity 5300 Tseo Total 90,200 62,200 152,400 77 297 1 2 NA NA NA 220 Required: 1 Compute the product margins for the B300 and 1500 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 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.) B300 T500 Total Product margin Hi-Tek Manufacturing, Inc., makes two types of industrial component parts-the B300 and the 1500. An absorption costing income statement for the most recent period is shown Tek Manufacturing Inc. Income Statement Sales 5 1,635,200 Cost of goods sold 1.215,32 Gross margin 420,168 Selling and administrative expenses 570,000 Net operating loss (149,832) Hi-Tek produced and sold 60,200 units of B300 at a price of $19 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 doltars as the allocation base Additional information relating to the companys two product lines is shown below Direct materials Direct Labo Manufacturing overhead Cost of goods told 5304 T500 Total $400,600 $ 162.500 5 362,000 5.120,000 $42.900 163.000 435:12 5.1.215.03 The company has created an activity based costing system to evaluate the profitability of its products Hi-Teks ABC implementation team concluded that 556.000 and $108,000 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 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 1300 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 (nachine-hours) Setups (setup hours) Productsustaining number of products) Other (organization i sustaining costs) Total manufacturing overhead cost Manufacturing Overhead 5202,692 124,740 100,400 60.500 5488,332 Activity 3300 T500 Total 90,200 62,200 152,400 77 220 297 1 1 2 NA NA NA Required: 1 Compute the product margins for the B300 and 7500 under the company s traditional costing system 2. Compute the product margins for 8300 and 1500 under the activity based costing system 3. Prepare a quantitative comparison of the traditional and activity based cost assignments 300 150 Total of Amount Amount Amount Traditional Cost System % 95 5 Total cost assigned to products 0 $ $ Total cost 0 B300 T500 Total of Amount % of Total amount Amount Total Amount Amount Activity-Based Costing System Direct costs Total cost $ 3300 T500 Total % of Total Amount % of Amount Amount Total Amount Amount Activity-Based Costing System Direct costs % % Indirect costs % Total cost assigned to products Costs not assigned to products Total cost
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/07/6691eeae97d30_8546691eeae3525a.jpg)
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/07/6691eeaf2d916_8546691eeaec187c.jpg)
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/07/6691eeafcb5b1_8556691eeaf5f32d.jpg)
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/07/6691eeb079d50_8566691eeb0119ba.jpg)
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/07/6691eeb11a056_8566691eeb0a57d1.jpg)
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/07/6691eeb1b351b_8576691eeb154258.jpg)
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/07/6691eeb2436ba_8576691eeb1dadd8.jpg)
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/07/6691eeb2df456_8586691eeb27b093.jpg)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started