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Hi-Tek Manufacturing, Incorporated, makes two types of Industrial component parts-the B300 and the T500. An absorption costing Income statement for the most recent period

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Hi-Tek Manufacturing, Incorporated, 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 Incorporated Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating loss $ 1,768,400 1,233,930 534,470 580,000 $ (45,530) HI-Tek produced and sold 60,400 units of B300 at a price of $21 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: Direct materials Direct labor Manufacturing overhead Cost of goods sold $ 400,900 $ 120,500 T500 $ 162,100 $ 42,100 Total $ 563,000 162,600 508,330 $ 1,233,930 The company has created an activity-based costing system to evaluate the profitability of its products. HI-Tek's ABC Implementation team concluded that $58,000 and $108,000 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 (setup hours) Product-sustaining (number of products) other (organization-sustaining costs) Total manufacturing overhead cost Required: Manufacturing Overhead $ 200,430 146,800 100,800 8300 90,600 Activity T500 62,400 Total 153,000 77 290 367 1 1 2 60,300 NA NA NA $ 508,330 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 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 dollar amount.) Product margin B300 T500 Total 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.) Product margin B300 T500 Total Required 1 Required 2 Required 3 Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations to 2 decimal places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.) Traditional Cost System Total cost assigned to products Total cost Activity-Based Costing System Direct costs: Indirect costs: Total cost assigned to products Costs not assigned to products: Total cost Amount Amount B300 % of Amount T500 % of Total Amount B300 T500 % of Total Amount Amount % of Total Amount Total Amount

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