Required 1 Required 2 Required 3 Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations to 2 decir places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.) B300 T500 Total % of % of Amount Amount Amount Traditional Cost System Direct materials $ 400,100 71.2 % 162,100 28.8 % $ 562,200 Direct labor 120,200 74.1 % 42,000 25.9 % 162,200 Manufacturing overhead 387,044 74.1 % 135,240 25.9 % 522,284 Total cost assigned to products $ 907,344 $ 339,340 $ 1,246,684 Total cost $ 1,246,684
Required 1 Required 2 Required 3 Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations to 2 decir places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.) B300 T500 Total % of % of Amount Amount Amount Traditional Cost System Direct materials $ 400,100 71.2 % 162,100 28.8 % $ 562,200 Direct labor 120,200 74.1 % 42,000 25.9 % 162,200 Manufacturing overhead 387,044 74.1 % 135,240 25.9 % 522,284 Total cost assigned to products $ 907,344 $ 339,340 $ 1,246,684 Total cost $ 1,246,684
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
I believe there is something missing on my chart above the "Total Cost" line. Please help! Thank you! :)
Transcribed Image Text:Required 1
Required 2
Required 3
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
Total
% of
% of
Amount
Amount
Amount
Traditional Cost System
Direct materials
2$
400,100
71.2 %
$
162,100
28.8 %
$
562,200
Direct labor
120,200
74.1 %
42,000
25.9 %
162,200
Manufacturing overhead
387,044
74.1 %
135,240
25.9 %
522,284
Total cost assigned to products
2$
907,344
$
339,340
$
1,246,684
Total cost
$
1,246,684
Transcribed Image Text:Hi-Tek Manufacturing Inc.
Income Statement
$ 1,714,000
1,246,844
467,156
590,000
(122,844)
Sales
Cost of goods sold
Gross margin
Selling and administrative expenses
Net operating loss
$
Hi-Tek produced and sold 60,100 units of B300 at a price of $20 per unit and 12,800 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:
B300
T500
Total
$ 400,100
$ 120,200
Direct materials
$ 162,100
562, 200
162,200
522,444
Direct labor
$4
42,000
Manufacturing overhead
Cost of goods sold
$ 1,246,844
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 $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:
Manufacturing
Activity
Activity Cost Pool (and Activity Measure)
Machining (machine-hours)
Setups (setup hours)
Product-sustaining (number of products)
Other (organization-sustaining costs)
Overhead
B300
T500
Total
$ 209,884
150,060
101,600
60,900
$ 522,444
91,000
62,200
153, 200
76
290
366
1
1
2
NA
NA
NA
Total manufacturing overhead cost
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