HiTek Manufacturing, Incorporated, makes two types of Industrial component parts--the B300 and the 1500. An absorption costing Income statement for the most recent period is shown HI-Yak Manufacturing Incorporated Income Statement Sales $ 1,766,100 Cost of woods sold 1,224,276 Gross margin 541,524 Selling and administrative expenses Niet operating loss $(78,425) Hi Tek produced and sold 60.300 units of 3300 at a price of $21 per unit and 12,500 units of 1500 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: 620.000 $400, 100 $ 120,500 15.00 $ 162,900 $ 42,200 Direct materials Direct labor Manufacturing overhead Cast of goods sold Yotal 5 563.000 162,700 499,076 $1,224,776 The company has created an activity based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $56,000 and $107,000 of the company's advertising expenses could be directly traced to 1300 and 1500, 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, The company has created an activity based costing system to evaluate the profitability of its products. HiTek's ABC implementation team concluded that $56,000 and $107.000 of the company's advertising expenses could be directly traced to 1300 and 1500 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 custaining (number of products) Other (organization-sustaining costs) Total manufacturing overhead cost Manufacturing Overhead $ 205,556 138,620 102,000 60,900 5.499,076 6300 90,000 71 1 NA Activity T500 62,600 240 1 NA Total 153,400 311 2 NA Required: 1. Compute the product margins for the 1300 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.) B300 T500 Total Product margin Reed 1 Required 2 >
