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Hi-Tek Manufacturing Inc. Income Statement $ 1,714,000 1,246,844 467,156 590,000 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating loss $ (122,844) 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 Direct labor $ 400,100 $ 162,100 $ 562, 200 162, 200 522,444 $ 1,246,844 $ 120, 200 $ 42,000 Manufacturing overhead 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 $53,000 and $109,000 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: Manufacturing Activity Total Activity Cost Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) Product-sustaining (number of products) Other (organization-sustaining costs) Overhead B300 T500 $ 209,884 150,060 101,600 60,900 91,000 62,200 153, 200 76 290 366 1 1 NA NA NA Total manufacturing overhead cost $ 522,444

Hi-Tek Manufacturing Inc. Income Statement $ 1,714,000 1,246,844 467,156 590,000 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating loss $ (122,844) 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 Direct labor $ 400,100 $ 162,100 $ 562, 200 162, 200 522,444 $ 1,246,844 $ 120, 200 $ 42,000 Manufacturing overhead 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 $53,000 and $109,000 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: Manufacturing Activity Total Activity Cost Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) Product-sustaining (number of products) Other (organization-sustaining costs) Overhead B300 T500 $ 209,884 150,060 101,600 60,900 91,000 62,200 153, 200 76 290 366 1 1 NA NA NA Total manufacturing overhead cost $ 522,444

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter5: The Income Statement And The Statement Of Cash Flows
Section: Chapter Questions
Problem 2MC: The following information is available for Cooke Company for the current year: The gross margin is...
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Please help with T500. Thanks!

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.) B300 T500 Total Product $ 422,070 $ 56,014 X $ 478,084 margin
Transcribed Image Text: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.) B300 T500 Total Product $ 422,070 $ 56,014 X $ 478,084 margin
Hi-Tek Manufacturing Inc. Income Statement $ 1,714,000 1,246,844 467,156 590,000 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating loss $ (122,844) 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 $ 400,100 $ 120, 200 Direct materials $ 162,100 $ 562, 200 162, 200 Direct labor $ 42,000 Manufacturing overhead 522,444 Cost of goods sold $ 1,246,844 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $53,000 and $109,000 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: Manufacturing Activity Activity Cost Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) Product-sustaining (number of products) Other (organization-sustaining costs) Overhead B300 T500 Total $ 209,884 150,060 101,600 60,900 91,000 62,200 153,200 76 290 366 1 1 2 NA NA NA Total manufacturing overhead cost $ 522,444
Transcribed Image Text:Hi-Tek Manufacturing Inc. Income Statement $ 1,714,000 1,246,844 467,156 590,000 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating loss $ (122,844) 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 $ 400,100 $ 120, 200 Direct materials $ 162,100 $ 562, 200 162, 200 Direct labor $ 42,000 Manufacturing overhead 522,444 Cost of goods sold $ 1,246,844 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $53,000 and $109,000 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: Manufacturing Activity Activity Cost Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) Product-sustaining (number of products) Other (organization-sustaining costs) Overhead B300 T500 Total $ 209,884 150,060 101,600 60,900 91,000 62,200 153,200 76 290 366 1 1 2 NA NA NA Total manufacturing overhead cost $ 522,444
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