Problem 7-16 (Algo) Comparing Traditional and Activity-Based Product Margins [LO7-1, LO7-3, L07.4, L07-5] Hi-Tek Manufacturing. Incorporated, makes two industrial component parts-B300 and T500. An absorption costing income statement for the most recent period is shown below: Hi-Tek produced and sold 60,400 units of 8300 at a price of $20 per unit and 12,600 units of T500 at a price of $39 per unit. The company's traditional cost system alfocates manufacturing overhead to products using a plantwide overhead rate and direct iabor dollars as the allocation base. Additional information relating to the company's two product lines is shown below: The company created an activity-based costing system to evaluate the profitability of its products. HI-Tek's ABC implementation team concluded that $60,000 and $108,000 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 Required: 1. Compute the product margins for 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. Complete this quetion by cateriag your answers in the tabs below. Compute the product margins for B300 and T500 under the company's traditional costing system. Note; Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount. 1. Compute the product margins for 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. Complete this question by entering your answers in the tabs below. Compute the product margins for B300 and T500 under the activity-based costing system. Note: Negative product margins should be indicated by a minus sign. Round your intermediate calculations to 2 decima! places, \begin{tabular}{|c|c|c|c|c|c|} \hline & & sot & & 7 or & Total Amount \\ \hline & Amount & \begin{tabular}{l} Total \\ Amount \\ \end{tabular} & Amount & \begin{tabular}{l} Total \\ Amount \\ \end{tabular} & \\ \hline \multicolumn{6}{|l|}{ Activity-Based Costing System } \\ \hline \multicolumn{6}{|l|}{ Direct costs: } \\ \hline & & & & & \\ \hline & & & & & \\ \hline & & & & & \\ \hline \multicolumn{6}{|l|}{ Indirect costs: } \\ \hline & & & & & \\ \hline & & & & & \\ \hline Total cost assigned to products & 0 & & 0 & & 0 \\ \hline \multicolumn{6}{|l|}{ Costs not assigned to products: } \\ \hline & & & & & \\ \hline & & & & & \\ \hline Total cost & & & & & $ \\ \hline \end{tabular} Aequired 2 ghearised
