Can someone please help me??? 69% 720 PM 1.228 165 Cost of goods sold Gross marg
ID: 2575268 • Letter: C
Question
Can someone please help me???
69% 720 PM 1.228 165 Cost of goods sold Gross margn Seling and administrative espenses Net operating loss Hi-Tek produced and sold 60,100 units of B300 at a price of $20 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: 120,400 $ 42,500 62900 Direct labor Cost of goods sold The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $55,000 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 Cost Pool (and Activity Measure) Setups (setup hours) Other ( 90,600 62900 260 153,500 204.155 35,10 00 800 71 Inumber of prodacts) Total manufacturing overhead oost Required 1. Compute the product margins for the B300 and T500 under the company's traditional costing system. (Do not round your overhead rate. Round your other intermediate and final answers to the nearest whole number.) 162.900 Product margin 001 2. Compute the product margins for B300 and T500 under the activity-based costing system. (Negative product margins should be indicated by a minus sign. Round your intermediate calculations to 2 decimal places.) Product margn 3. Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Do not round your overhead rate. Round your other intermediate calculations and final answers to the nearest whole number. Round your "Percentage" answer to 1 decimal place. (i.e. .1234 should be entered as 12.3) Dieect materialsExplanation / Answer
1 Plant wide overhead rate=Manufacturing overhead/Total direct labour cost=501665/162900=3.08 Computation of product margin under traditiona costing B300 T500 Total Sales 1202000 500000 1702000 (60100*20) (12500*40) Lesss:Total costs Direct materials 400700 162900 563600 Direct labor 120400 42500 162900 Manufacturing overhead 370832 130900 726500 (120400*3.08) (42500*3.08) Product margin 310068 163700 473768 2 Computation of product margin under activity-based cost assignments: B300 T500 Total Sales 1202000 500000 1702000 (60100*20) (12500*40) Lesss:Total costs Direct materials 400700 162900 563600 Direct labor 120400 42500 162900 Manufacturing overhead 200008 240657 440665 (Note:1) Product margin 480892 53943 534835 Notes: 1. Manufacturing overhead under activity-based costing: Activity allocated overhead Activity cost pool Manufactuirng overhead B300 T500 Total Cost driver rates B300 T500 Total 1 2 3 4 5 6=2/5 7=3*6 8=4*6 9=7+8 Machining 204155 90600 62900 153500 1.33 120498 83657 204155 Setups 135710 71 260 331 410 29110 106600 135710 Product-sustaining 100800 1 1 2 50400 50400 50400 100800 Other 61000 Cant be allocated Total 200008 240657 440665 3 Quanitative comparison of traditional and activity based costing: B300 T500 Total % of % of Amount Total amount Amount Total amount Amount Traditional cost system Direct materials 400700 71.10% 162900 28.90% 563600 Direct labor 120400 73.91% 42500 26.09% 162900 Manufacturing overhead 370832 73.91% 130900 26.09% 501732 Total costs assigned to products 891932 336300 1228232 Selling and administrative 560000 total cost 1788232 B300 T500 Total % of % of Amount Total amount Amount Total amount Amount Activity-based costing system Direct materials 400700 71.10% 162900 28.90% 563600 Direct labor 120400 73.91% 42500 26.09% 162900 Advertising expenses 55000 33.74% 108000 66.26% 163000 Indirect costs: Machining 120498 59.02% 83657 40.98% 204155 Setups 29110 21.45% 106600 78.55% 135710 Product sustaining 50400 50.00% 50400 50.00% 100800 Total costs assigned to products 200008 240657 440665 Costs not assigneed to products Selling and administrative (560000-55000-108000-61000) 336000 Others 61000 total cost 2167830