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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
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 $1,089,110Step by Step Solution
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