I am resubmitting this question as the answer to number two is incorrect from the guidance I was given throught Bartleby.   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 below:   Hi-Tek Manufacturing Inc.Income Statement Sales $ 1,643,000   Cost of goods sold   1,230,620   Gross margin   412,380   Selling and administrative expenses   620,000   Net operating loss $ (207,620)       Hi-Tek  produced and sold 60,200 units of B300 at a price of $19 per unit and 12,800 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 $ 400,600     $ 162,700     $ 563,300   Direct labor $ 120,700     $ 42,900       163,600   Manufacturing overhead                   503,720   Cost of goods sold                 $ 1,230,620       The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek’s ABC implementation team concluded that $51,000 and $104,000 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) Overhead     B300     T500     Total   Machining (machine-hours) $ 211,140       90,300     62,700     153,000   Setups (setup hours)   130,380       78     240     318   Product-sustaining (number of products)   101,200       1     1     2   Other (organization-sustaining costs)   61,000       NA     NA     NA   Total manufacturing overhead cost $ 503,720                         Required 1. Compute the product margins for the B300 and T500 under the company’s traditional costing system. (Do not round your overhead rate. Round your other intermediate and final answers to the nearest whole number.)         B300 T500 Total Product margin $250,598 $161,512 $412,110   2. 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 margin $ $ $

Question

I am resubmitting this question as the answer to number two is incorrect from the guidance I was given throught Bartleby.

 

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 below:

 

Hi-Tek Manufacturing Inc.
Income Statement
Sales $ 1,643,000  
Cost of goods sold   1,230,620  
Gross margin   412,380  
Selling and administrative expenses   620,000  
Net operating loss $ (207,620)  

 

 

Hi-Tek  produced and sold 60,200 units of B300 at a price of $19 per unit and 12,800 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 $ 400,600     $ 162,700     $ 563,300  
Direct labor $ 120,700     $ 42,900       163,600  
Manufacturing overhead                   503,720  
Cost of goods sold                 $ 1,230,620  

 

 

The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek’s ABC implementation team concluded that $51,000 and $104,000 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) Overhead     B300     T500     Total  
Machining (machine-hours) $ 211,140       90,300     62,700     153,000  
Setups (setup hours)   130,380       78     240     318  
Product-sustaining (number of products)   101,200       1     1     2  
Other (organization-sustaining costs)   61,000       NA     NA     NA  
Total manufacturing overhead cost $ 503,720                      

 


Required

1. Compute the product margins for the B300 and T500 under the company’s traditional costing system. (Do not round your overhead rate. Round your other intermediate and final answers to the nearest whole number.)

 

 
 
  B300 T500 Total
Product margin $250,598 $161,512 $412,110


 

2. 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 margin $ $ $

 

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