3 requirement question

Chapter 7 Graded Problems Help Sales 9 2,100,000 1,600.000 500,000 Gross margin Selling and administrative expenses Net operating loss (50,000) points Hl-Tek produced and sold 70,000 units of B300 at a price of $20 per unit and 17,500 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 $436,300 251,700 $ 688,000 304,000 608,000 Print Direet naterials 200,000 104,000 Direct labor Manufacturing overhead Cost of goods sold s 1,600,000 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $50,000 and $100,000 of the company's advertising expenses could be directly traced to 8300 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: ManufactaringActiv Activity Cost Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) Product-sustaining (number of products) Other (organization-sustaining costa) Overhead300500Tot s 213,500 90,000 62,500 152,500 375 157,500 120,000 117,000 s 608,000 300 XA HA NA - Total nanufacturing overhead cost 1. Compute the product margins for the 8300 and T500 under the company's traditional costing system. 2. Compute the product margins for 8300 and T500 under the activity-based costing system. Required: 3. Prepare a quantitative comparison of the traditionel and activity-based cost assignments Pre..: 1.of 51 Next