11.00 points Hi-Tek Maruacturing Inc. makes two types of industrial component pa
ID: 2570557 • Letter: 1
Question
11.00 points Hi-Tek Maruacturing Inc. makes two types of industrial component parts-the B300 and the T500. An absorption costing income statement for the most recent period is shown below Income Slalement Sales Cost of gonds sald Gross margin Selling and administrative expenses Net operating loss 5 1,639,100 1210,047 429 550,000 Hi-Tek produced and sold 60,200 units of B300 at a price of S19 per unit and 12,700 units of T500 at a price of S39 per unit. The company's tracitional cost systen allocates manufacturing overtead to products using a plantwide overhead rate and direct labor dollars as the allocation base. Additional intormation relating to the company's two product lines is shown below Direct materials Direct labor S 400,700 162.200 S 120,100 42,100 562,900 162,200 481947 1,210,047 Cost of goods sold The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $57,000 and $105,000 or the company's advertising expenses could be directy 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 showm below B300 Activity Cost Pool (and Activity Measure Machining machine-hours) Setups (setup hours) Product-sustaining (number of products) Other (organization sustaining casts) Total manufacturing overhead cost T500 Total S 209,747 90,800 2,300 153,100 283 113,200 73 210 NA 50,400 484 94 NA NA Required 1. Compute the product margins for the 8300 and T500 under the company's tradlitional costing system (Do not round your overhead rate. Round your other intermediate and final answers to the nearest whole number.) B300 500 Total Product margin $ 263 924 65.129 429053 2. Compute the product marans tor 300 and T500 underthe activity based costing system Negative product margins should be indicated by a minus sign. Round your intermediate calculations to 2 decimal places B300 1500 Iotal Product marginExplanation / Answer
Answer to 2nd part
Answer to 3rd part
Selling and administative cost = $57,000 + $105,000
.................................................= $162,000
Cost 1st Stage Cost Pool Pool Activity Driver Usage Pool Activity Cost Pool Driver Allocations B300 T500 Total Rates Machining MHr. $209,747 90,800 62,300 153,100 $1.370 Setups Setup Hrs. 113,200 73 210 283 $400 Product Sustaining # of Products 101,600 1 1 2 $50,800 Organizational Sustaining NA 60,400 NA NA NA Total Mfg. Overhead $484,947Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.