Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

keep getting percents wrong, complete problem for me and get the correct percentages, just for the third part Hi-Tek Manufacturing, Inc., makes two types of

image text in transcribedimage text in transcribed

keep getting percents wrong, complete problem for me and get the correct percentages, just for the third part

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 Manufacturing Inc. Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating loss 1,697,300 1,251,610 445,690 640,000 $ (194, 310) Hi-Tek produced and sold 60,100 units of B300 at a price of $20 per unit and 12,700 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 T500 Total Direct materials Direct labor Manufacturing overhead Cost of goods sold 400,500 162,900 563,400 162,700 525,510 1,251,610 120,200 42,500 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $59,000 and $105,000 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 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 Manufacturing Overhead 214,060 148,95 101,600 Activit T500 90,500 62,400 152,900 B300 Total 71 260 331 60,900 NA NA NA 525,510 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. B300 T500 Total %of %of Amount Amount Amount Traditional Cost System Direct materials Direct labor Manufacturing overhead Total cost assigned to products Selling and administrative Total cost $ 400,500. 44.00% |$ 162.9000| 480 % $ 563,400 162,700 525,510 $1,251,610 640,000 $1,891,610 120.200 388,238 13 x % 42,500 137,272 $ 342,672 12.0 x % 0 43.00% 40.0 X % $ 908,938 B300 T500 Total %of %of Amount Total Amount Amount Total Amount Amount Activity-Based Costing Systenm Direct costs $ 400,500. 51.00% |$ 162.9000 12015.0% Direct materials 29.0 % $ 563,400 Direct labor 508.% 162,700 Indirect costs . 16.00% 31,94.0% 214,060 148,950 Machining 126,700 87,360 15.0% Setups 1700021.0% Total cost assigned to products Costs not assigned to products: 679,350 $ 409,760 1,089,110 Total cost $1,089,110

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions