Hi-Tek Manufacturing, Inc., makes two types of industrial component parts-the B300 and the T500. An...
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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: Hi-Tek Manufacturing Inc. Income Statement 1,776,200 Sales Cost of goods sold 1,212,290 563,910 Gross margin Selling and administrative expenses 560,000 13,910 Net operating loss Hi-Tek produced and sold 60,200 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 400,700 162,500 563,200 Direct labor 120, 200 2,400 162,600 486, 490 Manufacturing overhead 1,212, 290 Cost of goods sold
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