Homework answers / question archive / a Hi-Tek Manufacturing

a Hi-Tek Manufacturing

Accounting

Share With

a 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: Hi-Tek Manufacturing Incorporated Income Statement Sales $ 1,782,500 Cost of goods sold 1.212 381 Gross sargin 570,119 Selling and administrative expenses 640,000 Net operating loss 5 (69,881) Hi-Tek produced and sold 60,500 units of B300 at a price of $21 per unit and 12,800 units of T500 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 lines is shown below: B300 T500 Total Direct materials $ 400,800 $ 162,900 $ 563,700 Direct labor $ 120,400 $ 42,300 162,700 Manufacturing overhead 485,981 Cost of goods sold $1,212,381 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $55,000 and $110,000 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-sustaining in noture. 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 8300 T500 Total Machining (nachine-hours) $ 203,091 90,600 62,100 152, 700 Setups (setup hours) 122,590 79 220 299 Product-sustaining (number of products) 100,200 1 1 Other (organization-sustaining costs) 60,100 NA NA NA Total manufacturing overhead cost $. 485,981 5 2 Required: 1. Compute the product margins for the 8300 and T500 under the company's traditional costhg 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. < Prev 3 of 4 Next > 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.) 3300 T500 Total Product margin 5 < Required 1 Required >> < Prev 3 of 4 !!! Next > 3 var Guantitative con of the traditional and active comments (Round you can docentenwers to 1 decimal passing and other west the nearest way 10 500 Sod Tiet Am 11 Tout Direct mai Director Warning: To co do pro 0 1 H T! 1 0300 To T ho Activity Based Coating Oystem Direct Directe Oired labor Angebote Indicom Meng Producting Moned to produce Canned to product