Hi-Tek Manufacturing Inc. makes two types of industrial

component partsA????1the B300 and the T500. An absorption costing income

statement for the most recent period is shown below:

Hi-Tek Manufacturing Inc.

Income Statement

sold

administrative expenses

loss

Hi-Tek produced and sold 60,200 units of B300 at a price of $20

per unit and 12,600 units of T500 at a price of $39 per unit. The

companyA????1s 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 companyA????1s two product lines is shown below:

B300

T500

Total

materials

overhead

sold

The company has created an activity-based costing system to

evaluate the profitability of its products. Hi-TekA????1s ABC

implementation team concluded that $52,000 and $104,000 of the

companyA????1s 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 companyA????1s manufacturing overhead to four activities

as shown below:

Manufacturing

Activity

(and Activity Measure)

Overhead

(machine-hours)

90,300  

152,600  

hours)

72  

210  

(number of products)

1  

(organization-sustaining costs)

overhead cost

Required

Compute the product margins for the B300 and T500 under the

companyA????1s traditional costing system. (Round your

intermediate calculations to 2 decimal places and final answer to

the nearest whole dollars.)

Compute the product margins for B300 and T500 under the

activity-based costing system. (Negative product margins

should be indicated by a minus sign. Round your intermediate

calculations to 2 decimal places.)

Prepare a quantitative comparison of the traditional and

activity-based cost assignments. (Round your intermediate

calculations to 2 decimal places and "Percentage" answer to 1

decimal place. (i.e. .1234 should be entered as 12.3) and other

answers to nearest whole dollar amounts.)