Hi-Tek Manufacturing, Incorporated, makes two industrial component parts-B300 and T500. An absorption costing income statement for the most recent period is shown below: Hi-Tek Manufacturing, Incorporated Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses $ 1,631,300 1,239,528 391,772 Net operating loss 590,000 $ (198,228) Hi-Tek produced and sold 60,200 units of B300 at a price of $19 per unit and 12,500 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: Direct materials Direct labor Manufacturing overhead Cost of goods sold B300 $ 400,400 $ 120,800 T500 $ 162,100 $ 42,100 Total $ 562,500 162,900 514,128 $ 1,239,528 The company created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $57,000 and $102,000 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 nature. The ABC team also distributed the company's manufacturing overhead to four activities as shown below: Activity Cost Pool (and Activity Measure) Machining (machine-hours) Manufacturing Overhead Setups (setup hours) Product-sustaining (number of products) $ 212,948 140,280 100,600 B300 90,800 Activity T500 Total 62,400 74 1 260 1 153,200 334 2 Other (organization-sustaining costs) 60,300 NA ΝΑ ΝΑ Total manufacturing overhead cost $ 514,128 Required: 1. Compute the product margins for 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.

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 Cost of goods sold Gross margin Selling and administrative expenses Net operating loss $1,766,100 1,243,888 522,212 640,000 $ (117,788) Hi-Tek produced and sold 60,100 units of B300 at a price of $21 per unit and 12,600 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: Direct materials Direct labor Manufacturing overhead Cost of goods sold B300 $ 400,500 $ 120,000 T500 $ 162,000 $ 42,700 Total $ 562,500 162,700 518,688 $1,243,888 The company has created an activity-based costing system to evaluate the profitability of…

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 Cost of goods sold Selling and administrative expenses Gross margin Net operating loss $ 1,651,800 1,211,394 440,406 640,000 $ (199,594) Hi-Tek produced and sold 60,200 units of B300 at a price of $19 per unit and 12,700 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: Direct materials Direct labor Manufacturing overhead Cost of goods sold B300 $ 400,700 $ 162,000 $ 120,200 $ 42,000 T500 Total $ 562,700 162,200 486,494 $ 1,211,394 The company has created an activity-based costing system to evaluate the profitability…

Hi-Tek Manufacturing, 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: Hi-Tek Manufacturing Inc. Income Statement Sales Cost of goods sold $ 1,653,900 1,228,630 Gross margin Selling and administrative expenses Net operating loss 425,270 640,000 $ (214,730) Hi-Tek produced and sold 60,100 units of B300 at a price of $19 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: Direct materials Direct labor Manufacturing overhead Cost of goods sold B300 $ 400,500 $162,700 $ $ 120,900 $ 42,800 T500 Total 563,200 163,700 501,730 $ 1,228,630 The company has created an activity-based costing system to evaluate the profitability of its products.…

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 IncorporatedIncome Statement Sales $ 1,716,000 Cost of goods sold 1,209,314 Gross margin 506,686 Selling and administrative expenses 580,000 Net operating loss $ (73,314)   Hi-Tek produced and sold 60,400 units of B300 at a price of $20 per unit and 12,700 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 $ 400,100 $ 162,000 $ 562,100 Direct labor $ 121,000 $ 42,700 163,700 Manufacturing overhead     483,514 Cost of goods sold     $ 1,209,314   The company has created an…

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 IncorporatedIncome Statement Sales $ 1,714,000 Cost of goods sold 1,224,031 Gross margin 489,969 Selling and administrative expenses 580,000 Net operating loss $ (90,031)   Hi-Tek produced and sold 60,100 units of B300 at a price of $20 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 $ 400,300 $ 162,500 $ 562,800 Direct labor $ 120,900 $ 42,300 163,200 Manufacturing overhead     498,031 Cost of goods sold     $ 1,224,031   The company has created an…

Hi-Tek Manufacturing, Incorporated, makes two industrial component parts-B300 and T500. An absorption costing income state for the most recent period is shown below: Hi-Tek Manufacturing, Incorporated Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating loss. Hi-Tek produced and sold 60,300 units of B300 at a price of $20 per unit and 12,500 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 labo dollars as the allocation base. Additional information relating to the company's two product lines is shown below: Direct materials Direct labor Manufacturing overhead Cost of goods sold $ 1,706,000 1,221,008 484,992 570,000 $ (85,008) Activity Cost Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) Product-sustaining (number of products) Other (organization-sustaining costs) Total manufacturing overhead…

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 IncorporatedIncome Statement Sales $ 1,693,400 Cost of goods sold 1,219,200 Gross margin 474,200 Selling and administrative expenses 630,000 Net operating loss $ (155,800)   Hi-Tek produced and sold 60,100 units of B300 at a price of $20 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:     B300 T500 Total Direct materials $ 400,800 $ 162,600 $ 563,400 Direct labor $ 120,300 $ 42,100 162,400 Manufacturing overhead     493,400 Cost of goods sold     $ 1,219,200   The company has created an…

Hi-Tek Manufacturing, 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:   Hi-Tek Manufacturing Inc.Income Statement Sales $ 1,755,300   Cost of goods sold   1,253,994   Gross margin   501,306   Selling and administrative expenses   610,000   Net operating loss $ (108,694 )     Hi-Tek produced and sold 60,000 units of B300 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 allocation base. Additional information relating to the company’s two product lines is shown below:     B300 T500 Total Direct materials $ 400,800 $ 162,200 $ 563,000 Direct labor $ 120,200 $ 42,400   162,600 Manufacturing overhead           528,394 Cost of goods sold         $ 1,253,994     The company has…

Hi-Tek Manufacturing, Incorporated, makes two industrial component parts-B300 and T500. An absorption costing income state for the most recent period is shown below: Hi-Tek Manufacturing, Incorporated Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating loss. Hi-Tek produced and sold 60,300 units of B300 at a price of $20 per unit and 12,500 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 labo dollars as the allocation base. Additional information relating to the company's two product lines is shown below: Direct materials Direct labor Manufacturing overhead Cost of goods sold $ 1,706,000 1,221,008 484,992 570,000 $ (85,008) Activity Cost Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) Product-sustaining (number of products) Other (organization-sustaining costs) Total manufacturing overhead…