Problem 7-16 Comparing Traditional and Activity-Based Product Margins [LO7-1, LO7-3, LO7-4, LO7-5]
Problem 7-16 Comparing Traditional and Activity-Based Prod Hi-Tek Manufacturing, Inc., makes two types of industrial component parts-the statement for the most recent period is shown: Required 2 R Hi-Tek Manufacturing Inc Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating loss 1,631,300 1,214,264 417,036 600,088 $(182,964) Compute the product margins f intermediate calculations to 2 o Hi-Tek produced and sold 60,200 units of B300 at a price of $19 per unit and 1 company's traditional cost system allocates manufacturing overhead to produc dollars as the allocation base. Additional information relating to the company's B300 B300 T500 Total $140 62,39516:,900Product margin Direct materials Direct labor Manufacturing overhead Cost of goods sold 120,40042,500 162,9e0 487.964 1,214, 264 The company has created an activity-based costing system to evaluate the prc team concluded that $60,000 and $109,000 of the company's advertising exp respectively. The remainder of the selling and administrative expenses was org distributed the company's manufacturing overhead to four activities as shown 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 211,554 115,210 101,000 B30 90 %of Amount Amount Traditional Cost System 60,200 487,964 Total cost assigned to products Requirec 1. Compute the product margins for the B300 and T500 under the company's 2. Compute the product margins for B300 and T500 under the activity-based 3. Prepare a quantitative comparison of the traditional and activity-based cost Total cost B300 %of Complete this question by entering your answers in the tabs below Amount Total Amount Amoun Activity-Based Costing Systenm Direct costs Required Required 2 Required 3 Compute the product margins for B300 and T500 under the activity-based costi be indicated by a minus sign. Round your intermediate calculations to 2 decimal 300 T500 Total Indirect costs Product margin Required 1 Required 3 Total cost assigned to products Problem 7-16 Comparing Traditional and Activity-Based Prod Hi-Tek Manufacturing, Inc., makes two types of industrial component parts-the statement for the most recent period is shown: Required 2 R Hi-Tek Manufacturing Inc Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating loss 1,631,300 1,214,264 417,036 600,088 $(182,964) Compute the product margins f intermediate calculations to 2 o Hi-Tek produced and sold 60,200 units of B300 at a price of $19 per unit and 1 company's traditional cost system allocates manufacturing overhead to produc dollars as the allocation base. Additional information relating to the company's B300 B300 T500 Total $140 62,39516:,900Product margin Direct materials Direct labor Manufacturing overhead Cost of goods sold 120,40042,500 162,9e0 487.964 1,214, 264 The company has created an activity-based costing system to evaluate the prc team concluded that $60,000 and $109,000 of the company's advertising exp respectively. The remainder of the selling and administrative expenses was org distributed the company's manufacturing overhead to four activities as shown 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 211,554 115,210 101,000 B30 90 %of Amount Amount Traditional Cost System 60,200 487,964 Total cost assigned to products Requirec 1. Compute the product margins for the B300 and T500 under the company's 2. Compute the product margins for B300 and T500 under the activity-based 3. Prepare a quantitative comparison of the traditional and activity-based cost Total cost B300 %of Complete this question by entering your answers in the tabs below Amount Total Amount Amoun Activity-Based Costing Systenm Direct costs Required Required 2 Required 3 Compute the product margins for B300 and T500 under the activity-based costi be indicated by a minus sign. Round your intermediate calculations to 2 decimal 300 T500 Total Indirect costs Product margin Required 1 Required 3 Total cost assigned to products
