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 $ 1,637,100 Cost of goods sold 1,236,520 Gross margin 400,580 Selling and administrative expenses 600,000 Net operating lors $ (199,420) Hi-Tek produced and sold 60,300 units of 8300 at a price of $19 per unit and 12,600 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 $ 400,800 $ 120,400 T500 $ 162,900 $ 43,000 Direct materials Direct labor Manufacturing overhead Cost of goods sold Total $ 563,700 163,400 509,420 $ 1,236,520 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 $106,000 of the company's advertising expenses could be directly traced to 1300 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 (netup hours) Product-sustaining (number of products) Other (organization-sustaining costs) Total manufacturing overbead cost Manufacturing overhead $ 214,480 132,840 101,800 60,300 $ 509, 420 B300 90,700 74 1 NA Activity T500 62,500 250 1 NA Total 153,200 324 2 NA 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 -70 Saved Help Sa $ 400, 800 $ 120,400 $ 162,900 $ 43,000 Direct materials Direct labor Manufacturing overhead Cost of goods sold $ 563,700 163,400 509,420 $ 1,236,520 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 $106,000 of the company's advertising expenses could be directly traced to 1300 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. Manufacturing Activity Activity cost Pool (and activity Measure) Overhead 1300 Machining (machine-hours) $ 214,480 90,700 153,200 Setups (setup hours) 132,840 Product-sustaining number of products) 101,800 1 Other (organization-sustaining costs) 60,300 Total manufacturing overhead coat $ 509,420 Total 74 T500 62,500 250 1 NA 324 2 NA NA Required: 1. Compute the product margins for the 8300 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 ossignments. 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 Tsoo 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 Required 2 > 70 Saved H. $ 400, 800 $ 120,400 $ 162,900 $ 43,000 Direct materials Direct labor Manufacturing overhead Cost of goods sold $ 563,700 163,400 509, 420 $ 1,236,520 Overhead Total T500 62,500 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 $106,000 of the company's advertising expenses could be directly traced to B300 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: Manufacturing Activity Activity Cost Pool (and Activity Measure) B300 Machining machine-hours) $ 214, 480 90,700 153,200 Setups (setup hours) 74 250 Product-sustaining (number of products) 101,800 Other (organization-sustaining costs) 60,300 Total manufacturing overhead cost $ 509,420 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. 132,840 1 NA 1 NA 324 2 NA Complete this question by entering your answers in the tabs below. 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.) B300 T500 Total Product margin Saved Help er 70 places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.) B300 T500 % of % of Total Amount Amount Amount Traditional Cost System Total cost assigned to products Total cost B300 T500 Total Amount % of Total Amount % of Total Amount Amount Amount Activity-Based Costing System Direct costs Indirect costs: Total cost assigned to products Costs not assigned to products Total cost Prev 1 of 1 # Next