Question

Check my work 2 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: 10 points Hi-Tek Manufacturing Inc. Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating loss $ 1,695,300 1,263, 671 431,629 590,000 $ (158,371) eBook Print References 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 $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 $ 400,900 $ 162,600 $ 120,700 $ 42,800 Direct materials Direct labor Manufacturing overhead Cost of goods sold Total $ 563,500 163,500 536,671 $ 1,263, 671 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $56,000 and $107,000 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 nat The ABC team also distributed the company's manufacturing overhead to four activities as shown below: Manufacturing Overhead Activity T500 Activity Cost Pool (and Activity Measure) B300 Total

Answer 1

х Cla Question Sheetv7 - Microsoft Excel Home Insert Page Layout Formulas Data Review View Developer QuickBooks (?) X N1 A B с D E F G H J K L L M N o 1 2 1) 3 4 5 Calculation of product margin as per Traditional costing Total B300 T500 No. of Units Sold 60,000 12,700 Per Unit B300 T500 60,000 12,700 6 7 Sales: 1,200,000 495,300 20 39 8 9 10 11 Less: Cost of Goods Sold Direct material Direct labor manufacturing overhead 400,900 120,700 396,185 162,600 42,800 140,486 6.68 2.01 6.60 12.80 3.37 11.06 12 13 14 Product Margin 282,215 149,414 4.70 11.76 15 16 17 2) Total B300 60,000 18 19 20 T500 Per Unit B300 T500 60,000 12,700 No. of Units Sold 12,700 21 Sales: 1,200,000 495,300 20 39 22 23 24 25 26 27 Less: Cost of Goods Sold Direct material Direct labor manufacturing overhead Less: Selling and Admin Exp 6.68 2.01 400,900 120,700 212,240 56,000 162,600 42,800 263,631 107,000 12.80 3.37 20.76 (See Note 1 Below) 8.43 3.54 0.93 28 29 Product Margin 410,160 (80,731) 6.84 (6.36) 30 31 32 Activate Windows Go to PC settings to activate Windows Sheet2034 sh Shl W 90% U Sheet2023 Sheet2024 Sheet2025 Sheet2026 Sheet2027 Sheet2028 Sheet2029 Sheet2030 Sheet2031 Sheet2032 Sheet2033 Ready X Q 3:44 AM 21/09/20

х Cla Question Sheetv7 - Microsoft Excel Home Insert Page Layout Formulas Data Review View Developer QuickBooks (?) X y N61 foc | A B Note 1: Overhead allocation sheet с D E F G H J K L L M N 0 33 34 T500 35 Activity Machining Setup Product Sustaining Total Cost Driver 153900 359 Total OH Cost 213,921 161,550 100,400 36 37 B300 Driver OH Cost Incurred assigned 91000 126490 79 35550 1 50200 OH Rate 1.39 450.00 50200.00 Driver Incurred 62900 280 OH Cost assigned 87431 126000 50200 2 1 38 39 40 Total 475,871 212240 263631 41 Quantitative Comparison of the traditional and activity based assignment. 42 3) 43 44 Traditional costing system ABC costing system 45 B300 T500 B300 T500 Total amount 46 %age Amount %age 47 48 49 50 Direct material Direct labor manufacturing overhead Amount 400,900 120,700 396,185 %age 71.1% 73.8% 73.8% Amount 162,600 42,800 140,486 %age 28.9% 26.2% 26.2% Total Amount 563,500 163,500 536,671 71.1% 73.8% 34.4% 162,600 42,800 107,000 28.9% 26.2% 65.6% 563,500 163,500 163,000 51 345,886 52 Total cost assigned to product 917,785 Selling and administrative Expense Total Cost 1,263,671 590,000 1,853,671 Amount Direct cost: Direct material 400,900 Direct labor 120,700 Selling and Admin Exp 56,000 Indirect Cost: Machining 126,490 Setup 35,550 Product Sustaining 50.200 Total cost assigned to product 789,840 Cost Not assigned to product Selling and Admin Exp Other 59.1% 40.9% 53 22.0% 87,431 126,000 50,200 576,031 78.0% 50.0% 213,921 161,550 100,400 1,365,871 54 50.0% 55 56 57 58 427,000 60,800 1,853,671 59 Total Cost 60 61 Sheet2023 Sheet2024 Sheet2025 Sheet2026 Sheet2027 Sheet2028 Sheet2029 Sheet2030 Sheet2031 Sheet2032 Sheet2033 Ready Activate Winder Go to PC settings to acuvale wadows Sheet2034 Shu 1 BE 90% U 3:44 AM e Q 21/09/20 X