Problem 7-16 (Algo) Comparing Traditional and Activity-Based Product Margins [LO7-1, LO7-3, LO7-4, [07.5] H1-Tek Manufacturing, Incorporated, makes two types of industrial component parts-the B300 and the T500. An absorption costing income statement lor the most recent period is shown: Hi. Tek produced and sold 60.400 units of 8300 at a price of $20 per unat and 12.500 units of 5500 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 llines is shown below: The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Jek's ABC implemientation team concluded that $58,000 and $107,000 of the company's advertising expenses could be directly traced to B300 and 1500 . respectively. The remainder of the selling and administrative expenses was organization-sustaining in nature. The ABC tearn also distributed the company's manufacturing overhead to four activities as shown below: The company has created an activity.based costing system to evaluate the profitability of its products. HH-Tek's ABC implenentation team concluded that $58,000 and $107,000 of the company's advertising expenses could be directly traced to B300 and T500. respectlvely. The remainder of the selling and administrative expenses was organization-sustaining in nature. The ABC team alsa distributed the company's manufacturing overhead to four actlvities as shown below: Required: 1. Compute the product margins for the B300 and 1500 under the company's traditional costing system. 2. Compute the product margins for 8300 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 the B300 and T500 under the company's traditional costing system. (Aound your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar omount.) Required: 1. Compute the product margins for the 8300 and T500 under the company's traditional costing system. 2. Compute the product margins for 8300 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 the B300 and 1500 under the company's traditional costing 5y stem. (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.) Required: 1. Compute the product margins for the B300 and TS00 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 1500 under the activity-based costing system. (Negotive product marpirs thould be indicated by a minus sign. Round your intermediate calculations to 2 decimal places.) Required 2 Problem 7-16 (Algo) Comparing Traditional and Activity-Based Product Margins [LO7-1, LO7-3, LO7-4, [07.5] H1-Tek Manufacturing, Incorporated, makes two types of industrial component parts-the B300 and the T500. An absorption costing income statement lor the most recent period is shown: Hi. Tek produced and sold 60.400 units of 8300 at a price of $20 per unat and 12.500 units of 5500 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 llines is shown below: The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Jek's ABC implemientation team concluded that $58,000 and $107,000 of the company's advertising expenses could be directly traced to B300 and 1500 . respectively. The remainder of the selling and administrative expenses was organization-sustaining in nature. The ABC tearn also distributed the company's manufacturing overhead to four activities as shown below: The company has created an activity.based costing system to evaluate the profitability of its products. HH-Tek's ABC implenentation team concluded that $58,000 and $107,000 of the company's advertising expenses could be directly traced to B300 and T500. respectlvely. The remainder of the selling and administrative expenses was organization-sustaining in nature. The ABC team alsa distributed the company's manufacturing overhead to four actlvities as shown below: Required: 1. Compute the product margins for the B300 and 1500 under the company's traditional costing system. 2. Compute the product margins for 8300 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 the B300 and T500 under the company's traditional costing system. (Aound your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar omount.) Required: 1. Compute the product margins for the 8300 and T500 under the company's traditional costing system. 2. Compute the product margins for 8300 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 the B300 and 1500 under the company's traditional costing 5y stem. (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.) Required: 1. Compute the product margins for the B300 and TS00 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 1500 under the activity-based costing system. (Negotive product marpirs thould be indicated by a minus sign. Round your intermediate calculations to 2 decimal places.) Required 2
