Need help with #2 please!!! Hi-Tek Manufacturing Inc. makes two types of industr

Question

Need help with #2 please!!!

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 below Hi-Tek Manufacturing Inc. Income Statement 1,649,700 Sales Cost of goods sold Gross margin 1,229,055 420,645 590,000 $(169,355) Selling and administrative expenses Net operating loss Hi-Tek produced and sold 60,300 units of B300 at a price of $19 per unit and 12,600 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

Explanation / Answer

Cost 1st Stage Cost Pool Pool Activity Driver Usage Pool Activity Cost Pool Driver Allocations B300 T500 Total Rates Machining MHr. $211,975 90,300 62,200 152,500 $1.390 Setups Setup Hrs. 130,380 78 240 318 $410 Product Sustaining # of Products 100,600 1 1 2 $50,300 Organizational Sustaining NA 60,100 NA NA NA Total Mfg. Overhead $503,055 B300 T500 Total Sales $1,145,700 $504,000 $1,649,700 Direct materials $400,900 $162,200 $563,100 Direct labor 120,600 42,300 162,900 Advertising expense 51,000 108,000 159,000 MOH assigned (2nd Stage Allocations)      Machining pool 125,517 86,458 211,975      Setup pool 31,980 98,400 130,380      Product sustaining 50,300 50,300 100,600 Total costs assigned $780,297 $547,658 $1,327,955 Product margin (ABC) $365,403 ($43,658) $321,745

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