Question

LII.1. IIUITIVUIK 1 Help Save & EXIT Submit Check my work 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: 1.33 points Hi-Tek Manufacturing Inc. Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating loss $ 1,693,400 1,254,832 438,568 550.000 $ (111,432) eBook Print References 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: Direct materials Direct labor Manufacturing overhead Cost of goods sold B300 T500 Total $ 400,600 $ 162,600 $ 563,200 $ 120,500 $ 42,800 163,300 528, 332 $ 1,254,832 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $52,000 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:

Answer 1

Calibri 11 A A ab Wrap Text General X Cut Copy S Format Painter Clipboard BIU- - A Merge & Center % 9 %8- Insert Dele Conditional Format as Cell Formatting Table Styles Styles Font Alignment Number Cell X for Traditional Method A D Traditional Method A B C D E B30 T500 Total 3 Product Margin 4 Sale 5 Total Variable Cost 6 Product Margin 1202000 910959 291041 4 91400 343873.00 147527 1693400 1254832 438568 8 9 Require Part 1 10 Particular 11 Traditional Costing Amount 12 Direct Material 13 Direct Labour 14 Manufecturing Overhead (Woriking Note 1) 15 Total Variable Cost 16 Selling and distribution Cost 17 Total Cost (Amount in $) B300 T500 Total % of Total Cost Amount % of sale 400600 22.20 162600.00 9.01 563200 120500 6.68 42800.00 2.37 163300 389859 21.60 138473.00 7.67 528332 910959 50.47 343873.00 19.05 1254832 550000 1804832 18 19 Working Note 1 20 Manufecturing Overhead for B300 21 22 23 Manufecturing Overhead for T500 (528332/163300)*120500 $ 389859 (528332/163300)*42800 $ 138473 24 25 -36. AB mount in s 1 2 4 Type here to search Totem

Celeid Paste La Copy Format Painter Clipboard BIU - 9A Merge & Center Insert 0 Conditional Format as Formatting Table Styles Cell Styles Font Alignment Number Al Traditional Method EL 25 Amount Amount in S B300 T500 Total % Of Total Cost Amount % of Total Cost 400600 22.20 162600 9 .01 563200.00 6.68 42800 2.37 163300.00 52000 2.88 109000 6.04 161000.00 0.00 0.00 204607 11.34 262725 1 4.56 467332.00 777707 43.09 577125 3 1.98 1354832.00 120500 | 26 ABC Costing 27 Particular 28 Direct Cost 29 Direct Material 30 Direct Labour 31 Selling And Distribution 32 Indirect Cost 33 Manufecturing Overhead Working No. 2 34 Total Cost Assigned to product 35 Cost Not Assigned to product 36 Manufecturing Overhead (Org. Sustaining) 37 Selling And Distribution (Org Sustaining) 38 Total Cost 39 40 41 Working NO 2 42 Activity Cost Pool 43 Machining 44 Setup 45 Product Sutaining 46 Total Allocated Cost 47 Other 48 61000 389000 550000-52000-109000 804832 777707 N577125 1 le Total of basis B300 1500 1500 Total Cost Basis Cost Basis Cost 153400 90900120897 .62500 83125 377 7 7 33110 300 129000 201 506001 50600 HA 204607 262725 Not to be allocated Not to be located Total TEL 204022 1 62110 101200 4 67332 61000 528332 50 51 52 112 D E O Type here to search OH OH

Calibri 11 A A ab Wrap Text General X Cut Copy S Format Painter Clipboard BIU- - A Merge & Center % 9 %8- Insert Dele Conditional Format as Cell Formatting Table Styles Styles Font Alignment Number Cell X for Traditional Method A D Traditional Method A B C D E B30 T500 Total 3 Product Margin 4 Sale 5 Total Variable Cost 6 Product Margin 1202000 910959 291041 4 91400 343873.00 147527 1693400 1254832 438568 8 9 Require Part 1 10 Particular 11 Traditional Costing Amount 12 Direct Material 13 Direct Labour 14 Manufecturing Overhead (Woriking Note 1) 15 Total Variable Cost 16 Selling and distribution Cost 17 Total Cost (Amount in $) B300 T500 Total % of Total Cost Amount % of sale 400600 22.20 162600.00 9.01 563200 120500 6.68 42800.00 2.37 163300 389859 21.60 138473.00 7.67 528332 910959 50.47 343873.00 19.05 1254832 550000 1804832 18 19 Working Note 1 20 Manufecturing Overhead for B300 21 22 23 Manufecturing Overhead for T500 (528332/163300)*120500 $ 389859 (528332/163300)*42800 $ 138473 24 25 -36. AB mount in s 1 2 4 Type here to search Totem

Celeid Paste La Copy Format Painter Clipboard BIU - 9A Merge & Center Insert 0 Conditional Format as Formatting Table Styles Cell Styles Font Alignment Number Al Traditional Method EL 25 Amount Amount in S B300 T500 Total % Of Total Cost Amount % of Total Cost 400600 22.20 162600 9 .01 563200.00 6.68 42800 2.37 163300.00 52000 2.88 109000 6.04 161000.00 0.00 0.00 204607 11.34 262725 1 4.56 467332.00 777707 43.09 577125 3 1.98 1354832.00 120500 | 26 ABC Costing 27 Particular 28 Direct Cost 29 Direct Material 30 Direct Labour 31 Selling And Distribution 32 Indirect Cost 33 Manufecturing Overhead Working No. 2 34 Total Cost Assigned to product 35 Cost Not Assigned to product 36 Manufecturing Overhead (Org. Sustaining) 37 Selling And Distribution (Org Sustaining) 38 Total Cost 39 40 41 Working NO 2 42 Activity Cost Pool 43 Machining 44 Setup 45 Product Sutaining 46 Total Allocated Cost 47 Other 48 61000 389000 550000-52000-109000 804832 777707 N577125 1 le Total of basis B300 1500 1500 Total Cost Basis Cost Basis Cost 153400 90900120897 .62500 83125 377 7 7 33110 300 129000 201 506001 50600 HA 204607 262725 Not to be allocated Not to be located Total TEL 204022 1 62110 101200 4 67332 61000 528332 50 51 52 112 D E O Type here to search OH OH