Hi-Tek Manufacturing, Incorporated, makes two types of industrial component parts-the 8300 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 $1,642,900 1,246,912 395,988 590,000 $ (194,012) Hi-Tek produced and sold 60,400 units of 8300 at a price of $19 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:
Hi-Tek Manufacturing, Incorporated, makes two types of industrial component parts-the 8300 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 $1,642,900 1,246,912 395,988 590,000 $ (194,012) Hi-Tek produced and sold 60,400 units of 8300 at a price of $19 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:
Chapter1: Financial Statements And Business Decisions
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Step 1: Meaning of activity based costing
VIEWStep 2: 1. Calculation of product margin as per the traditional costing system
VIEWStep 3: 2. Calculation of product margin as per the activity based costing system
VIEWStep 4: 3. Quantitative comparison of the traditional costing system
VIEWStep 5: 3. Quantitative comparison of the activity based costing system
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