Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Hi-Tek Manufacturing. Incorporated, makes two industrial component parts - 8300 and TS00 An absorption costing income statement for the most recent period is shown below.
Hi-Tek Manufacturing. Incorporated, makes two industrial component parts - 8300 and TS00 An absorption costing income statement for the most recent period is shown below. Hi-Tek produced and sold 60.500 unts of 8300 at a price of $21 per unit and 12.800 units of T500 at a price of $40 per unit. The companys traditional cost system allocates manifactining overhead to products using a plantwide owethead rate and direct labor dollars as the allocation base. Additional information relating to the companys two product lines is shown below: The company created an activity based cosing system to evaluate the profitability of its products. H. Fek's ABC implementation team concluded that $57,000 and $107,000 of the company's advertising expenses could be directy traced to B300 and T500, respectively. The remander of the selling and administrattve experises was organizabon-sustaining in nature. The ABC tesm also distributed the coripany's manufacturing overthead to four activities as shown betow Required: 1. Compute the product marpins for 8300 and 1500 under the compary traditional conting system 2 Compute the product margins for 8300 and 1500 under the ocivity-based costing syaten. Compute the product margins for 8300 and T500 under the company's traditional costing sy/fem. Note: Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount. Prepare a quantitative comparison of the traditional and activity-based cost assignments. Compute the product margins for 8300 and 1500 under the activity-based costing system. Note: Negative product margins should be indicated by a minus sign. Round your Intermediate calculations to 2 decimal places
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started