HiTek Manufacturing, Inc., makes two types of industrial component parts-the 300 and the 1500. An absorpcon conting income statement for the most recent period is shown Sales Cast of goods sold Grass margin Selling and administrative expenses Net operating loss $1,693,500 1,209,674 483,826 620,000 $(136,174) Hi-Tek produced and sold 60,300 units of B300 at a price of $20 per unit and 12,500 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 T500 Total Direct materials $ 400, 400 $ 162,400 S 562,800 Direct labor $ 120,100 $ 42,60e 162,700 Manufacturing overhead 484,274 Cost of poods sold 5 1,209,674 Bee The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $55,000 and $101.000 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. Activity Cost Pool (and Activity Measure) Machining (machine hours) Setups Cup hours) Productsustaining anber of products) other organization tutti costs) Farha Manufacturing Overhead 5200.254 322, 120 101, be1ee 17 Activity T500 62, 210 3 NA Total 153,40 24 90,700 74 1 NA NA ............ * 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 $ 200, 954 122, 120 101, eee 60, 10e 5 484, 174 8300 90,700 74 1 NA Activity T5ee 62, 7ee 218 1 NA Total 153,400 284 2 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 B300 and T500 under the activity-based costing system. (Negative product margins she be indicated by a minus sign. Round your intermediate calculations to decimal places. 8300 T500 Total Product margin 9 0 Required 1 Required 3>
