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H-Tek Manufacturing, Inc., makes two types of industrial component parts statement for the most recent period is shown Hi Manufacturing Inc. Income Statement Sales Cost
H-Tek Manufacturing, Inc., makes two types of industrial component parts statement for the most recent period is shown Hi Manufacturing Inc. Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating loss $ 1,714,000 1,241 255 472,245 570.000 $ (97,755) Sint Hi-Tek produced and sold 60 500 units of B300 at a price of $20 per unit and 12,600 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 830 1500 Total Direct to 400,900 162.2005 563, 160 Direct labor $ 120,000 $ 42.500 163.100 Manufacturing overhead 515.555 Cost of gods sold $ 1,241,955 The company has created an activity based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $59,000 and $106.000 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 Atelity rachitheachine har Setup hours) down (of products the organization in cos Tots turn overhead cost Manufacturing Overhead $207,495 147.ee 100,00 0,000 $ 515,359 Activity 300 7500 Total 50,90062,50 15.100 270 14 1 1 2 Required 1 Comote the product margins for the 8300 and 1500 under the company traditional costing system 2 Compte the product margins for 1300 and 500 under the activity-based costing system 3. Repare a quantitative comparison of the trional and activity based cost assignments
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