Homework i Hi-Tek Manufacturing Inc. Income Statement Hi-Tek Manufacturing, Inc., makes two types of industrial component parts-the B300 and the T500. An absorption costing income statement for the most recent period is shown: Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating loss Direct materials Direct labor Saved Manufacturing overhead Cost of goods sold $ 1,708,000 1,213,520 Hi-Tek produced and sold 60,400 units of B300 at a price of $20 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: 494,480 630,000 $ (135,520) 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 B300 T500 $ 400,200 $ 162,300 $ $ 120,500 $ 42,500 Total 562,500 163,000 488,020 $1,213,520 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $52,000 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: Manufacturing Overhead Help Save & Exit Submit $ 199,160 127,260 101,000 60,600 $ 488,020 B300 90,600 62,600 230 1 73 1 Activity T500 Total 153,200 303 2

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.) Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calcu Compute the product margins for B300 and T500 under the activity-based costing system. (Negative product margins sho6 be indicated by a minus sign. Round your intermediate calculations to 2 decimal places.) Hi-Tek Manufacturing, Inc., 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 produced and sold 60,400 units of B300 at a price of $20 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: The company has created an activity-based costing system to evaluate the profitability of its products. HI-Tek's ABC implementation team concluded that \$52,000 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