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	$ 1,709,200
Cost of goods sold	1,251,200
Gross margin	458,000
Selling and administrative expenses	570,000
Net operating loss	$ (112,000)

Hi-Tek produced and sold 60,500 units of B300 at a price of $20 per unit and 12,800 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:

	B300	T500	Total
Direct materials	$ 400,500	$ 162,700	$ 563,200
Direct labor	$ 121,000	$ 42,300	163,300
Manufacturing overhead			524,700
Cost of goods sold			$ 1,251,200

The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $57,000 and $104,000 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)	Manufacturing Overhead	Activity
B300	T500	Total
Machining (machine-hours)	$ 205,020	90,100	62,900	153,000
Setups (setup hours)	157,380	76	290	366
Product-sustaining (number of products)	101,800	1	1	2
Other (organization-sustaining costs)	60,500	NA	NA	NA
Total manufacturing overhead cost	$ 524,700

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.

Ch 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 10 Sales $ 1, 709,200 points Cost of goods sold 1, 251, 200 Gross margin 158,000 Skipped Selling and administrative expenses $70,000 Net operating loss $ (112, 000) Hi-Tek produced and sold 60,500 units of B300 at a price of $20 per unit and 12,800 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 eBook dollars as the allocation base. Additional information relating to the company's two product lines is shown below: B300 T500 Total Direct materials $ 400, 500 $ 162, 700 $ 563, 200 Hint Direct labor $ 121, 000 $ 42, 300 163, 300 Manufacturing overhead 524, 700 Cost of goods sold $ 1, 251, 200 Print The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $57,000 and $104,000 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 References distributed the company's manufacturing overhead to four activities as shown below: Manufacturing Activity Activity Cost Pool ( and Activity Measure) Overhead B300 T500 Total Machining (machine-hours) $ 205, 020 90, 100 62,900 153,000 Setups (setup hours) 157, 380 76 290 366 Product-sustaining (number of products) 101, 800 1 Other (organization-sustaining costs) 60, 500 NA NA NA Total manufacturing overhead cost $ 524, 700 Required: . 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. Mcrespectively. I ne remainder of the selling and administrative expenses was organization-sustaining in nature. I ne ABC team also distributed the company's manufacturing overhead to four activities as shown below: Manufacturing Activity Activity Cost Pool (and Activity Measure) Overhead B300 T500 Total 90, 100 62,900 153,000 10 Machining (machine-hours) $ 205, 020 Setups ( setup hours) 157, 380 76 290 366 points Product-sustaining (number of products) 101, 800 Other (organization-sustaining costs) 60, 500 NA NA NA Skipped Total manufacturing overhead cost $ 524, 700 Required: 1. Compute the product margins for the B300 and T500 under the company's traditional costing system. eBook 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. Hint Complete this question by entering your answers in the tabs below. Print Required 1 Required 2 Required 3 Compute the product margins for the B300 and T500 under the company's traditional costing system. (Round your References intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.) 3300 T500 Total Product margin $ 0 Required 1 Required 2respectively. I ne remainder of the selling and administrative expenses was organization-sustaining in nature. I ne ABC team also distributed the company's manufacturing overhead to four activities as shown below: Manufacturing Activity Activity Cost Pool (and Activity Measure) Overhead B300 T500 Total 90, 100 62,900 153,000 10 Machining (machine-hours) $ 205, 020 Setups ( setup hours) 157, 380 76 290 366 points Product-sustaining (number of products) 101, 800 Other (organization-sustaining costs) 60, 500 NA NA NA Skipped Total manufacturing overhead cost $ 524, 700 Required: 1. Compute the product margins for the B300 and T500 under the company's traditional costing system. eBook 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. Hint Complete this question by entering your answers in the tabs below. Print Required 1 Required 2 Required 3 Compute the product margins for B300 and T500 under the activity-based costing system. (Negative product margins should References be indicated by a minus sign. Round your intermediate calculations to 2 decimal places.) 8300 T500 Total Product margin $ 0 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 10 places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.) points B300 T500 Skipped % of % of Total Amount Amount Amount Traditional Cost System eBook Hint Total cost assigned to products 0 $ 0 $ Total cost $ Print B300 T500 % of % of Total Amount References Total Total Amount Amount Amount Amount Activity-Based Costing System Direct costs Indirect costs Mc Graw HillAmount Amount Traditional Cost System 10 points Total cost assigned to products 0 $ 0 $ Skipped Total cost $ B300 T500 eBook % of % of Total Amount Total Total Amount Amount Amount Amount Activity-Based Costing System Hint Direct costs Print In Indirect costs: References Total cost assigned to products $ 0 $ 0 Costs not assigned to products: Total cost $ Required 2 Required 3 >