Chapter 7 Homework #2 Help 4 Problem 7-16 Comparing Traditional and Activity-Based Product Margins [L07.1, LO73, LO74, LO75] 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: $ 1,701,300 Cost of goods sold Cross Bargin Print Set operating loss (115,257) Hi-Tek produced and sold 60,300 units of B300 at a price of $20 per unit and 12,700 units of T500 at a price of $39 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 400,200 $ 162,400 562,600 120,500 42,000 162,500 Direct labor Mecufacturing overhead 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 $54,000 and $103,000 of the company's advertising expenses could be directly traced to B300 and T500 The remainder of the selling and administrative expenses was organiza in nature. The ABC team also distributed the company's manufacturing overheed to four activities as shown below Prev 4 of Next >