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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
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 below Hi-Tek Manufacturing Inc. Income Statement 1,695,500 Sales 1,228,182 Cost of goods sold 467,318 Gross margin 560,000 Selling and administrative expenses (92,682) Net operating loss Hi-Tek produced and sold 60,400 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 Total B300 T500 400,000 162,500 562,500 Direct materials 162,700 120,600 42,100 Direct labor 502,982 Manufacturing overhead 1,228,182 Cost of goods sold
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