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Hi$-$Tek Manufacturing, Incorporated, makes two industrial component parts$$B$300$ and T$500.$ An absorption costing income statement for the most recent period is shown below:

Hi$-$Tek Manufacturing, IncorporatedIncome StatementSales$ $2,100,000$Cost of goods sold$1,600,000$Gross margin$500,000$Selling and administrative expenses$550,000$Net operating loss$ $(50,000)$

I've got Required $1$ completed, I've got Required $3($I think$),$ but I cannot get Required $2.$ IT doesn't make sense based on the calculations. I thought I had it right.

Hi$-$Tek produced and sold $70,000$ units of B$300$ at a price of $$20$ per unit and $17,500$ units of T$500$ at a price of $$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:

$$B$300$T$500$TotalDirect materials$ $436,300$$ $251,700$$ $688,000$Direct labor$ $200,000$$ $104,000304,000$Manufacturing overhead$608,000$Cost of goods sold$$$ $1,600,000$

The company 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 B$300$ and T$500,$ 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:

Activity Cost Pool $($and Activity Measure$)$Manufacturing OverheadActivityB$300$T$500$TotalMachining $($machine$-$hours$)$$ $213,50090,00062,500152,500$Setups $($setup hours$)157,50075300375$Product$-$sustaining $($number of products$)120,000112$Other $($organization$-$sustaining costs$)117,000$NANANATotal manufacturing overhead cost$ $608,000$

Required:

Compute the product margins for B$300$ and T$500$ under the company$$s traditional costing system.

Compute the product margins for B$300$ and T$500$ under the activity$-$based costing system.

Prepare a quantitative comparison of the traditional and activity$-$based cost assignments

Hi$-$Tek Manufacturing, Incorporated, makes two industrial component parts$-$B$300$ and T$500.$ An absorption costing income statement

for the most recent period is shown below:

Hi$-$Tek produced and sold $70,000$ units of B$300$ at a price of $$20$ per unit and $17,500$ units of T$500$ at a price of $$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:

The company 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 B$300$ and T$500,$

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:

Required:

Compute the product margins for B$300$ and T$500$ under the company's traditional costing system.

Compute the product margins for B$300$ and T$500$ under the activity$-$based costing system.

Prepare a quantitative comparison of the traditional and activity$-$based cost assignments.

Answer is not complete.

Complete this question by entering your answers in the tabs below.

Required $2$

Compute the product margins for B$300$ and T$500$ under the activity$-$based costing system.

Note: Negative product margins should be indicated by a minus sign. Round your intermediate calculations to $2$ decimal

places.

Required:

Compute the product margins for B$300$ and T$500$ under the company's traditional costing system.

Compute the product margins for B$300$ and T$500$ under the activity$-$based costing system.

Prepare a quantitative comparison of the traditional and activity$-$based cost assignments.

Answer is not complete.

Complete this question by entering your answers in the tabs below.

Required $1$

Required $2$

Compute the product margins for B$300$ and T$500$ under the company's traditional costing system

Compute the product margins for B$300$ and T$500$ under the activity$-$based costing system.

Note: Negative product margins should be indicated by a minus sign. Round your intermediate calculations to $2$ decimal

places.

Answer is not complete.

Complete this question by entering your answers in the tabs below.

Required $2$

Required $3$

Prepare a quantitative comparison of the traditional and activity$-$based cost assignments.

Note: Round your intermediate calculations to $2$ decimal places and "Percentage" answers to $1$ decimal place.

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