Required: 1. Compute the product margins for the B300 and T500 under the company's traditional costing system. 2. Compute the product margins for 8300 and T500 under the activitybased costing system. 3. Prepare a quantitative comparison ofthe traditional and activity-based cost assignments. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the product margins for B300 and T500 under the activity-based costing system. (Negative product margins should be indicated by a minus sign. Round your intermediate calculations to 2 decimal places.) m Complete this quaon hy' entering'your answers in the this below. Required 1 Required 2 Required 3 Prepare a quantitative comparison of the traditional and activitybased cost assignments. (Round your intermediate calculations to 2 decimal places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.) Total cost assigned to products 5 0 $ 0 $ 0 Total cost $ 0 Activity-Based Costing System Direct costs: % % % % % % Indirect costs: % % % % % % Total cost assigned to products Costs not assigned to products: Total cost 5 0 Required: 1. Compute the product margins for the B300 and T500 under the company's traditional costing system. 2. Compute the product margins for 3300 and T500 under the activitybased costing system. 3. Prepare a quantitative comparison ofthe traditional and activitybased cost assignments. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the product margins for the B300 and T500 under the company's traditional costing system. (Round your intermediate calculations to 2 decimal places and finai answers to the nearest whole dollar amount.) Requiredz > Hi-Tek Manufacturing, Inc., makes two types of industrial component partsthe B300 and the T500. An absorption costing income statement for the most recent period is shown: HiTek Manufacturing Inc. Income Statement Sales 5; 1,633,366 Cost of goods sold 1,267,885 Gross margin 425,415 Selling and administrative expenses 656,666 Net operating loss $ (224,585) [ HiTek produced and sold 60,100 units of B300 at a price of $19 per unit and 12,600 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: B366 T566 Total Direct materials 5 461,666 $ 162,166 $ 563,166 Direct labor $ 126,766 $ 42,566 163,266 Manufacturing overhead 481,585 Cost of goods sold 5 1,267,885 The company has created an activitybased costing system to evaluate the profitability of its products. HiTek's ABC implementation team concluded that $59,000 and $102,000 ofthe 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: Manufacturing Activity Activity Cost Pool (and Activity Measure) Overhead 3366 T566 Total Machining (machinehours) $ 264,155 96,966 62,666 153,566 Setups (setup hours) 116,536 71 266 271 Productsustaining (number of products) 166,666 1 1 2 Other (organizationsustaining costs) 66,366 NA NA NA Total manufacturing overhead cost $ 481,585
