ch5_hw_qa1_part3_br Required 1.Required 2Required 3Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations to 2 decimalplaces and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.)B300T500Total% of% ofAmountAmountAmountTraditional Cost SystemTotai cost assigned to productsTotal costB300T500Total% of% ofAmountTotal AmountAmountTotal AmountAmountActivity-Based Costing SystemDirect costs:Indirect costs:%Total cost assigned to productsCosts not assigned to products:Total cost|||求 HI-Tek Manufacturing, Ic., makes two types of Industrial component parts-the B300 and the T500. An absorption costing Incomestatement for the most recent perlod is shown:Hi-Tek Manufacturing Inc.Income Statement$ 1,768, 0001,217,932SalesCost of goods soldGross marginSelling and administrative expenses558,068610, 000Net operating loss(59,932)HI-Tek produced and sold 60,000 units of B300 at a price of $21 per unit and 12,700 units of T500 at a price of $40 per unit. Thecompany's traditional cost system allocates manufacturing overhead to products using a plantwide overhead rate and direct labordollars as the allocation base. Additional information relating to the company's two product lines is shown below:B3001500Total$ 400, 600 $ 162,300$ 120,900Direct materials562,900Direct labor42,200163, 1ееManufacturing overhead491,932Cost of goods sold$ 1,217,932The company has created an activity-based costing system to evaluate the profitability of its products. HI-Tek's ABC Implementationteam concluded that $53,000 and $104,000 of the company's advertising expenses could be directly traced to B300 and T500,respectively. The remalnder of the selling and administrative expenses was organization-sustalning in nature. The ABC team alsodistributed the company's manufacturing overhead to four activities as shown below:ManufacturingActivityActivity Cost Pool (and Activity Measure)Machining (machine-hours)Setups (setup hours)Product-sustaining (number of products)Other (organization-sustaining costs)OverheadвзееT500Total$ 204,75290,10062, 700152, 800126, 28078230308100, 60011260, 300NANANATotal manufacturing overhead cost$ 491,932Required:1. Compute the product margins for the B300 and T500 under the company's traditional costing system.2 Compute the product margins for B300 and T500 under the activity-based costing system.3. Prepare a quantitative comparison of the traditional and activity-based cost assignments.Complete this question by entering your answers in the tabs below.

Solution 1: Predetermined overhead rate = Estimated overhead / Estimated direct labor cost =…

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 $ 1,768, eee 1,217,932 Cost of goods sold Gross margin 55e, 068 Selling and administrative expenses 610, eee Net operating loss (59,932) HI-Tek produced and sold 60,000 units of B300 at a price of $21 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. B3ee 1500 Total $ 480,690 $ 162,300 S $ 120,900 $ 42,200 Direct materials 562,900 Direct labor 163,10e Manufacturing overhead 491,932 Cost of goods sold $ 1,217,932 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 $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-sustalning 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 8300 T500 Total $ 204,752 126, 280 152,8ee 3e8 90,100 62,700 78 230 100,600 6e, 300 $ 491,932 2 NA NA NA Total manufacturing overhead cost Requlred: 1. Compute the product margins for the B300 and T500 under the company's traditional costing system. 2 Compute the product margins for B300 and T500 under the activity-based costing system. 3. Prepare a quantitative comparison of the traditional and activity-based cost assignments.