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. |
|||
Sales |
$ |
1,716,000 |
|
Cost of goods sold |
1,203,159 |
||
Gross margin |
512,841 |
||
Selling and administrative expenses |
600,000 |
||
Net operating loss |
$ |
(87,159) |
|
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 |
$ |
400,600 |
$ |
162,300 |
$ |
562,900 |
||||||
Direct labor |
$ |
120,600 |
$ |
42,100 |
162,700 |
|||||||
Manufacturing overhead |
477,559 |
|||||||||||
Cost of goods sold |
$ |
1,203,159 |
||||||||||
The company has created an activity-based costing system to
evaluate the profitability of its products. Hi-Tek’s ABC
implementation team concluded that $50,000 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:
Manufacturing |
Activity |
||||||||||||
Activity Cost Pool (and Activity Measure) |
Overhead |
B300 |
T500 |
Total |
|||||||||
Machining (machine-hours) |
$ |
200,299 |
90,600 |
62,300 |
152,900 |
||||||||
Setups (setup hours) |
116,760 |
78 |
200 |
278 |
|||||||||
Product-sustaining (number of products) |
100,200 |
1 |
1 |
2 |
|||||||||
Other (organization-sustaining costs) |
60,300 |
NA |
NA |
NA |
|||||||||
Total manufacturing overhead cost |
$ |
477,559 |
|||||||||||
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.)
Product Margin B300
Product Margin T500
Total
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.)
Product Margin B300
Product Margin T500
Total
Hi-Tek Manufacturing Inc. makes two types of industrial component parts—the B300 and the T500. An absorption...
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 StatementSales$1,716,000Cost of goods sold1,217,184Gross margin498,816Selling and administrative expenses610,000Net operating loss$(111,184) Hi-Tek produced and sold 60,200 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...
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 $ 1,759,800 Cost of goods sold 1,248,243 Gross margin 511,557 Selling and administrative expenses 650,000 Net operating loss $ (138,443 ) Hi-Tek produced and sold 60,400 units of B300 at a price of $21 per unit and 12,600 units of T500 at a price of $39 per unit....
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 $ 1,772,400 Cost of goods sold 1,242,484 Gross margin 529,916 Selling and administrative expenses 610,000 Net operating loss $ (80,084 ) Hi-Tek produced and sold 60,400 units of B300 at a price of $21 per unit and 12,600 units of T500 at a price of $40 per unit....
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 $ 1,774,300 Cost of goods sold 1,251,130 Gross margin 523,170 Selling and administrative expenses 630,000 Net operating loss $ (106,830 ) Hi-Tek produced and sold 60,300 units of B300 at a price of $21 per unit and 12,700 units of T500 at a price of $40 per unit....
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 $ 1,655,600 Cost of goods sold 1,233,735 Gross margin 421,865 Selling and administrative expenses 600,000 Net operating loss $ (178,135 ) Hi-Tek produced and sold 60,400 units of B300 at a price of $19 per unit and 12,700 units of T500 at a price of $40 per unit....
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 $ 1,708,000 Cost of goods sold 1,228,693 Gross margin 479,307 Selling and administrative expenses 550,000 Net operating loss $ (70,693 ) Hi-Tek produced and sold 60,000 units of B300 at a price of $20 per unit and 12,700 units of T500 at a price of $40 per unit....
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 $ 1,649,900 Cost of goods sold 1,222,294 Gross margin 427,606 Selling and administrative expenses 560,000 Net operating loss $ (132,394 ) Hi-Tek produced and sold 60,100 units of B300 at a price of $19 per unit and 12,700 units of T500 at a price...
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 $ 1,691,500 Cost of goods sold 1,214,870 Gross margin 476,630 Selling and administrative expenses 580,000 Net operating loss $ (103,370 ) Hi-Tek produced and sold 60,200 units of B300 at a price of $20 per unit and 12,500 units of T500 at a price of $39 per unit....
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 $ 1,649,900 Cost of goods sold 1,254,430 Gross margin 395,470 Selling and administrative expenses 560,000 Net operating loss $ (164,530 ) Hi-Tek produced and sold 60,100 units of B300 at a price of $19 per unit and 12,700 units of T500 at a price of $40 per unit....
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 $ 1,705,200 Cost of goods sold 1,242,098 Gross margin 463,102 Selling and administrative expenses 610,000 Net operating loss $ (146,898 ) Hi-Tek produced and sold 60,300 units of B300 at a price of $20 per unit and 12,800 units of T500 at a price of $39 per unit....