Income Statement 1,693,580 1,226,892 Sales Cost of goods sold Gross margin selling administrative expenses Net operating loss 578.808 S (103,392) Hi-Tek produced and sold 60,300 units of B300 at a price of $20 per unlt and 12,500 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 8300TSeeTotal Direct naterials Direct labor Manufacturing overhead Cost of goods sold $ 4ee,eee162,900562,9ee 162,686 501,392 s 1,226,892 $ 128 see 42,100 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 $103,000 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 Activity Cost Pool (and Activity T509 $ 211,692 98,889 62,609 153,488 Setups (setup hours) Product-sustaining (number of products) Other (organization-sustaining costs) Total manufacturing overhead cost 127,688 181,200 60,900 501,392 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 asslgnments. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 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 actvity-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.) Total Product margin Required 2 Complete this question by entering your answers in the tabs below. Required 1Required 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.) 8300 T500 Total Product margin Required 1 Required 3> Required 1 Required 2Required 3 Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations to 2 decimal places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.) 9% of 6 of Traditional Cost System Total cost assigned to products Total cost B300 T500 Total 9% of 6 of Amount Total Amount Amount Total Amount Amount Activity-Based Costing System Direct costs Indirect costs: Total cost assigned to products Costs not assigned to products: Total cost
