Saved Help Save & EX Hi-Tek Manufacturing, Incorporated, makes two types of industrial component parts-the B300 and the T500. An absorption costing income statement for the most recent period is shown: 57 HTeX Manufacturing Incorporated Income Statement Bales Coat of goods sold 5 1,257,400 Cross margin 1,210,020 Selling and administrative expenses 539,380 640,000 Not operating loss 5 (100,620) Hi-Tek produced and sold 60,100 units of 8300 at a price of $21 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 location base. Additional information relating to the company's two product lines is shown below: 3300 7500 Total Direct materials $ 400,900 $ 162,800 $ 563,700 Direct labor $ 120,700 $ 42,600 163,300 Manufacturing overhead 491,020 Cost of goods sold $ 1,218,020 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 $103,000 of the company's advertising expenses could be directly traced to 1300 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 3300 7500 Total Machining (machine-hours) $ 206,280 90,000 62,800 152,800 123,840 210 Setups (setup hours) 288 Product-sustaining (number of products) 100,000 1 1 2 60,900 NA NA Other (organization-sustaining costs) Total manufacturing overhead cost $ 491,020 78 NA 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. BRE 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 final answers to the nearest whole dollar amount.) B300 T500 Total Product margin $ Required 1 Required 2 > ONWW252Fbb siue edu252Fwebapps%252 apter 7 Quiz Luwu Lyur Suyu www. 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: 1 Activity control and aetivity Measure) Machining machine-hours) Setups (setup hours) Product-ustaining number of products) other organization-sustaining conta) Total manufacturing overhead cost Hanufacturing Overhead 5 206,280 123,840 100,000 60,900 $ 491,020 11300 90,000 78 1 NA Activity T500 62,800 210 1 NA Total 152,00 288 2 NA 30.48:17 bok 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. Complete this question by entering your answers in the tabs below. Required 1 Reguired 2 Required 3 Compute the product margins for 8300 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.) B300 T500 Total Product margin $
