Hi-Tek Manufacturing, Incorporated, makes two industrial component parts-B300 and T500. An absorption costing income statementfor the most recent period is shown below:Hi-Tek Manufacturing, IncorporatedIncome StatementSalesCost of goods soldGross marginSelling and administrative expensesNet operating lossHi-Tek produced and sold 60,400 units of B300 at a price of $21 per unit and 12,800 units of T500 at a price of $39 per unit. Thecompany's traditional cost system allocates manufacturing overhead to products using a plantwide overhead rate and direct labordollars as the allocation base. Additional information relating to the company's two product lines is shown below:Direct materialsDirect laborManufacturing overheadCost of goods sold$ 1,767,6001,212,922554,678610,000$ (55,322)8300T500$ 400,300 $ 162,400$ 120,100. $ 42,400Activity Cost Pool (and Activity Measure)Machining (machine-hours)Setups (setup hours)Product-sustaining (number of products)Other (organization-sustaining costs)Total manufacturing overhead costTotal$ 562,700162,500487,722$ 1,212,922The company created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation teamconcluded that $59,000 and $106,000 of the company's advertising expenses could be directly traced to B300 and T500,respectively. The remainder of the selling and administrative expenses was organization-sustaining in nature. The ABC team alsodistributed the company's manufacturing overhead to four activities as shown below:ManufacturingOverhead$ 201,432125,990100, 20060,100$ 487,722B30090,300731NAActivityT50062,3002201NATotal152,6002932NA Required:1. Compute the product margins for 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.

Name: Hi-Tek Manufacturing, Incorporated, makes two industrial component pa
Uploaded: 2024-03-20T06:33:06.000Z
Channel: Bartleby
Description: Hi-Tek Manufacturing, Incorporated, makes two industrial component parts-B300 and T500. An absorption costing income statementfor the most recent period is shown below:Hi-Tek Manufacturing, IncorporatedIncome StatementSalesCost of goods soldGross ma

Activity based costing is the one where costs are computed based on each activity whereas under…

Business

Accounting

or the most recent period is shown below: Hi-Tek Manufacturing, Incorporated Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating loss Hi-Tek produced and sold 60,400 units of B300 at a price of $21 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: Direct materials: Direct labor $ 1,767,600 1,212,922 554,678 610,000 $ (55,322) Manufacturing overhead Cost of goods sold 8300 $ 400,300 $ 120, 100 T500 $ 162,400 $ 42,400 Total $562,700 162,500 487,722 $ 1,212,922 The company created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $59,000 and $106,000 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

or the most recent period is shown below: Hi-Tek Manufacturing, Incorporated Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating loss Hi-Tek produced and sold 60,400 units of B300 at a price of $21 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: Direct materials: Direct labor $ 1,767,600 1,212,922 554,678 610,000 $ (55,322) Manufacturing overhead Cost of goods sold 8300 $ 400,300 $ 120, 100 T500 $ 162,400 $ 42,400 Total $562,700 162,500 487,722 $ 1,212,922 The company created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $59,000 and $106,000 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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

(me following monation applies to the questions displayed below.j The following cost data for the year just ended pertain to Sentiments, Incorporated, a greeting card manufacturer: Direct material Advertising expense Depreciation on factory building Direct labor: wages Cost of finished goods inventory at year-end Indirect labor: wages Production supervisor's salary Service department costs* Direct labor: fringe benefits Indirect labor: fringe benefits Fringe benefits for production supervisor Total overtime premiums paid Cost of idle time: production employees Administrative costs Rental of office space for sales personnelt Sales commissions Product promotion costs Required: 1. Compute each of the following costs for the year just ended: All services are provided to manufacturing departments. $Cost of idle time is an overhead item; it is not included in the direct-labor wages given above. *The rental of sales space was made necessary when the sales offices were converted to storage…
Hansaben
Gadubhai
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 Cost of goods sold Gross margin Selling and administrative expenses Net operating loss Direct materials Direct labor $1,778,500 1,254,584 Hi-Tek produced and sold 60,500 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: Manufacturing overhead Cost of goods sold 523,916 610,000 $ (86,084) 8300 T500 $ 400,700 $ 162,300 $ $ 120,100 $ 42,600 Total 563,000 162,700 528,884 $1,254,584 The company has created an activity-based costing system to evaluate the profitability of its products.…
I need the answer to 2.B-3.
A
Given the following information, determine the product cost of one unit: Direct Materials = $60; Direct labor = $10; Apply Overhead based on $2 per Direct Labor hour; Direct labor hours is 4 hours per unit. a. $70 per unit b. $80 per unit c. $78 per unit d. $85 per unit Contribution margin is sales less: a. Fixed overhead and fixed selling and administrative expenses b. Variable Cost of goods sold and variable selling & administrative expenses c. Variable selling and administrative expemses and Fixed selling and administrative expenses d. variable cost of goods sold An investment generates an operating income of $100,000, and the average operating assets are $400,000. What is the return on the investment? a. 100% b. 75% c. 25% d. 20%
Larner Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains the following six activity cost pools and activity rates: Activity Cost Pool Labor-related Machine-related Machine setups Production orders. Shipments General factory Activity Rates $ 7.00 per direct labor-hour $ 4.00 per machine-hour $50.00 per setup $ 100.00 per order $ 150.00 per shipment $ 4.00 per direct labor-hour Cost and activity data have been supplied for the following products: Direct materials cost per unit Direct labor cost per unit 378 $ 3.00 $ 3.00 B52 $ 20.00 $ 6.00 2,000 100 Number of units produced per year Total Expected Activity 378 B52 Direct labor-hours. 1,000 20 Machine-hours 2,000 50 Machine setups 6 3 Production orders 5 3 8 3 Shipments Required: Compute the unit product cost of each product listed above. (Do not round intermediate calculations. Round your answers to 2 decimal places.) J78 B52 Unit product cost
A company has provided the following data from its activity-based costing accounting system: Indirect factory wages Factory equipment depreciation S 27,000 $ 204,000 Distribution of Resource Consumption across Activity Cost Pools: Activity Cost Pools Indirect factory wages Factory equipment depreciation Product Processing 48% 25% Customer Orders Other 38 128 Total 100% 100% 63% The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs that are not assigned to products. Required: a. Determine the total amount of indirect factory wages and factory equipment depreciation costs that would be allocated to the Product Processing activity cost pool. b. Determine the total amount of indirect factory wages and factory equipment depreciation costs that would NOT be assigned to products. Complete this question by entering your answers in the tabs below. Required A Required B Determine the total amnount of indirect factory wages and factory equipment…
answer in text form please (without image)