Check my work 4 Hi-Tek Manufacturing, Inc., makes two types of industrial compon
ID: 2554096 • Letter: C
Question
Check my work 4 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 50 points Hi-Tek Manufacturing Inc Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating loss 1,708,000 1,250,526 457,474 550,000 eBook $(92,526) Print References Hi-Tek produced and sold 60,200 units of 8300 at a price of $20 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: B300 T500 Total Direct materials Direct labor Manufacturing overhead Cost of goods sold 400,800 162,800 563,600 163,100 523,826 1,250,526 120,300 42,800Explanation / Answer
Statement Showing Product Margin
Statement Showing Product Margin
Under Traditional Costing System B300 T500 Total Sales in Unit 60200 12600 Selling price per unit $20 $40 Sales in $ $1,204,000 $504,000 $1,708,000 Less: Cost of Goods Sold Direct material 400800 162800 563600 Direct Labour 120300 42800 163100 Manufacturing Overhead 386365.8357 137460.1643 523826 Cost of goods Sold 907466 343060 1250526 Gross Margin $296,534 $160,940 $457,474 Traceable Selling & Adm. Exp. 57000 109000 166000 Product Margin $239,534 $51,940 $291,474 Non Traceable Selling & Adm Exp. 384000 Net Operating Profit / (Loss) ($92,526) Answer 2. Activity Cost Pool Estimated Overhead Expected use of Cost Drivers Activity-Based Overhead rate Machining 210726 152700 1.38 per machine hour Setups 150500 350 430 per setup hour Product Sustaining 102000 2 51000 per product Total Overhead 463226 Allocation of Overhead Cost Under ABC Particulars Model Total B300 T500 Machining 124338 86388 210726 Setups 28000 94500 122500 Product Sustaining 51000 51000 102000 Total 203338 231888 435226 Statement Showing Product Margin Under ABC B300 T500 Total Sales in Unit 60200 12600 Selling price per unit $20 $40 Sales in $ $1,204,000 $504,000 $1,708,000 Less: Cost of Goods Sold Direct material 400800 162800 563600 Direct Labour 120300 42800 163100 Manufacturing Overhead 203338 231888 435226 Cost of goods Sold 724438 437488 1161926 Gross Margin $479,562 $66,512 $546,074 Traceable Selling & Adm. Exp. 57000 109000 $166,000 Product Margin $422,562 ($42,488) $380,074 Non Traceable Selling & Adm Exp. $384,000 Non Traceable Other Manufacturing Exp. 60600 Net Operating Profit / (Loss) ($64,526) Answer 3. B300 T500 Total Amt % of Total Amt. % of Total Amt. Amount Traditional Cost System Direct material 400800 71.11% 162800 28.89% 563600 Direct Labour 120300 73.76% 42800 26.24% 163100 Manufacturing Overhead 386366 73.76% 137460.16 26.24% 523826 Traceable Selling & Adm. Exp. 57000 34.34% 109000 65.66% 166000 Total Cost Assigned to product 964465.8357 452060.1643 1416526 Non Traceable Selling & Adm Exp. 384000 Total Cost 1032526 B300 T500 Total Amt % of Total Amt. % of Total Amt. Amount Activity Based Costing Direct Costs Direct material 400800 71.11% 162800 28.89% 563600 Direct Labour 120300 73.76% 42800 26.24% 163100 Indirect Costs Machining 124338 59.00% 86388 41.00% 210726 Setups 28000 22.86% 94500 77.14% 122500 Product Sustaining 51000 50.00% 51000 50.00% 102000 Traceable Selling & Adm. Exp. 57000 34.34% 109000 65.66% 166000 Total Cost assigned to products 260338 340888 601226 Costs not assigned to products Non Traceable Other Manufacturing Exp. 60600 Non Traceable Selling & Adm Exp. 384000 Total costs 1045826