Please Help me, I am stuck on what to do. I need help on finding probem 2 and Pr
ID: 2575422 • Letter: P
Question
Please Help me, I am stuck on what to do. I need help on finding probem 2 and Problem 3, selling and adminstrative costs for the last table. Thank you
tomneducation.com/hm.tpXE FUA66632T3050B46 TSTTOb67642 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 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating loss S 1,778,300 1.212,893 565,407 620,000 S (54,593) Hi-Tek produced and sold 60,300 units of B300 at a price of $21 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 Direct materials Direct labor Manufacturing overhead Cost of goods sold $400,900 S 162,300 563,200 162,400 487.293 $ 1,212,893 $ 120,100 S 42,300 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $56,000 and $102,000 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 Acti T500 Activity Cost Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) Product-sustaining (number of products) Other (organization-sustaining costs) Total manufacturing overhead cost 8300 90, Total Overhead $ 203,623 121,770 101,600 60,300 $ 487,293 900 62,200 220 153,100 297 NA NA NA 10:00 PMExplanation / Answer
Selling and administrative expense
2. Advertising Expense. B300 - $56,000 , T500 - 102,000
3. Under traditional costing = $620,000
under ABC costing = $620,000-$56,000-$102,000 = 462,000