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places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.) B300 T500 % of % of Total Amount Amount Amount Traditional Cost System Total cost assigned to products

places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.) B300 T500 % of % of Total Amount Amount Amount Traditional Cost System Total cost assigned to products

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations to 2 decimal places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.) B300 T500 % of % of Total Amount Amount Amount Traditional Cost System Total cost assigned to products Total cost $ B300 T500 % of % of Total Amount Total Total Amount Amount Amount Amount Activity-Based Costing System Direct costs: Indirect costs: Total cost assigned to products $ $ Costs not assigned to products: Total cost < Required 2 Required 3 > Prev 7 of 8 Next > %24
Transcribed Image Text:Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations to 2 decimal places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.) B300 T500 % of % of Total Amount Amount Amount Traditional Cost System Total cost assigned to products Total cost $ B300 T500 % of % of Total Amount Total Total Amount Amount Amount Amount Activity-Based Costing System Direct costs: Indirect costs: Total cost assigned to products $ $ Costs not assigned to products: Total cost < Required 2 Required 3 > Prev 7 of 8 Next > %24
n.com/ext/map/index.n I?_con=con&externa_browser=0& n=https%253A%252F%252Fmybb.gvsu.edu%252FWebapps%252FP omework Problems i Saved Hi-Tek Manufacturing, Incorporated, 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 Incorporated Income Statement $ 1,647,600 1,207,955 Sales Cost of goods sold Gross margin Selling and administrative expenses 439,645 640,000 $ (200,355) Net operating loss Hi-Tek produced and sold 60,400 units of B300 at a price of $19 per unit and 12,500 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: в300 T500 Total $ 400,000 $ 120,500 $ 162,900 $ 42,700 $ 562,900 163,200 481,855 Direct materials Direct labor Manufacturing overhead Cost of goods sold $ 1,207,955 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $59,000 and $108,000 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) Machining (machine-hours) Setups (setup hours) Product-sustaining (number of products) Other (organization-sustaining costs) Overhead в300 T500 Total $ 206,685 113,570 101,400 90,900 62,200 153,100 77 200 277 1 1 60,200 $ 481,855 NA NA NA Total manufacturing overhead cost Required: 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. Prev 7 of 8 Next >
Transcribed Image Text:n.com/ext/map/index.n I?_con=con&externa_browser=0& n=https%253A%252F%252Fmybb.gvsu.edu%252FWebapps%252FP omework Problems i Saved Hi-Tek Manufacturing, Incorporated, 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 Incorporated Income Statement $ 1,647,600 1,207,955 Sales Cost of goods sold Gross margin Selling and administrative expenses 439,645 640,000 $ (200,355) Net operating loss Hi-Tek produced and sold 60,400 units of B300 at a price of $19 per unit and 12,500 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: в300 T500 Total $ 400,000 $ 120,500 $ 162,900 $ 42,700 $ 562,900 163,200 481,855 Direct materials Direct labor Manufacturing overhead Cost of goods sold $ 1,207,955 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $59,000 and $108,000 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) Machining (machine-hours) Setups (setup hours) Product-sustaining (number of products) Other (organization-sustaining costs) Overhead в300 T500 Total $ 206,685 113,570 101,400 90,900 62,200 153,100 77 200 277 1 1 60,200 $ 481,855 NA NA NA Total manufacturing overhead cost Required: 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. Prev 7 of 8 Next >
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