Questions
The price in a perfectly competitive market is $8. At that price, a firm is willing...

The price in a perfectly competitive market is $8. At that price, a firm is willing to supply 250 of a good. The firm's average total cost (ATC) to supply this quantity will be $6.5 and its average variable cost (AVC) will be $5.

What is the firm's Total Cost?

  • A. 1750
  • B. 2125
  • C. 1625
  • D. 2000
  • E. 1500
  • F. 1875

In: Economics

Builder Products, Inc. manufactures a caulking compound that goes through three processing stages prior to completion....

Builder Products, Inc. manufactures a caulking compound that goes through three processing stages prior to completion. Information on work in the first department, cooking, is given below for May:

Production data:
Units in process, May 1: 100% complete as to materials and 80% complete as to labour and overhead 16,700
Units started into production during May 127,000
Units completed and transferred out 117,000
Units in process, May 31: 60% complete as to materials and 20% complete as to labour and overhead ?
Cost data:
Work-in-process inventory, May 1:
Materials cost $ 2,850
Labour cost 3,760
Overhead cost 7,700
Cost added during May:
Materials cost 194,000
Labour cost 37,600
Overhead cost 90,400

Materials are added at several stages during the cooking process, whereas labour and overhead costs are incurred uniformly. The company uses the weighted average cost method. The company combines labour and overhead into a single cost category—conversion cost.

Required:
Prepare a production report for the cooking department for May. Use the following three steps in preparing your report:

4. Prepare a production report for the cooking department for May. Assuming the company uses the FIFO method. Follow parts (1) to (3). (Leave no cells blank, enter "0" wherever required. Round "Cost per equivalent unit" to 3 decimal places and the rest to the nearest dollar amount.)

  
Quantity Schedule and Equivalent Units

Quantity Schedule
Units to be accounted for:
Total units 0
Equivalent Units (EU)
Units Materials Labour Overhead
Units accounted for as follows:
Total units and equivalent units of production 0 0 0 0

Cost per Equivalent Unit

Materials Labour Overhead
Costs per equivalent unit

Cost Reconciliation

Note: There is difference of "$28" in both the values due to rounding and we feel a note which reads: "Due to rounding, your "Cost accounted for" may not be equal to "Cost to account for"".

Equivalent Units (EU)
Total Cost Materials Labour Overhead
Cost accounted for as follows:
Prior period cost in Work in Process, May 1 $14,310
Cost incurred during May:
To complete units in Work in Process, May 1
Total 0
To partially complete units in Work in Process, May 31
Total 0
Total cost $14,310
Cost transferred out, May 31 $14,310

In: Accounting

Problem 7-16 Comparing Traditional and Activity-Based Product Margins [LO7-1, LO7-3, LO7-4, LO7-5] Hi-Tek Manufacturing, Inc., makes...

Problem 7-16 Comparing Traditional and Activity-Based Product Margins [LO7-1, LO7-3, LO7-4, LO7-5]

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
Sales $ 1,689,500
Cost of goods sold 1,207,358
Gross margin 482,142
Selling and administrative expenses 630,000
Net operating loss $ (147,858 )

Hi-Tek produced and sold 60,100 units of B300 at a price of $20 per unit and 12,500 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:

B300 T500 Total
Direct materials $ 400,700 $ 162,200 $ 562,900
Direct labor $ 120,400 $ 42,800 163,200
Manufacturing overhead 481,258
Cost of goods sold $ 1,207,358

The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek’s ABC implementation team concluded that $59,000 and $105,000 of the company’s 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 company’s manufacturing overhead to four activities as shown below:

Manufacturing
Overhead		 Activity
Activity Cost Pool (and Activity Measure) B300 T500 Total
Machining (machine-hours) $ 205,288 90,800 62,400 153,200
Setups (setup hours) 113,570 77 200 277
Product-sustaining (number of products) 101,600 1 1 2
Other (organization-sustaining costs) 60,800 NA NA NA
Total manufacturing overhead cost $ 481,258

Required:

1. Compute the product margins for the B300 and T500 under the company’s traditional costing system.

2. Compute the product margins for B300 and T500 under the activity-based costing system.

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

Compute the product margins for the B300 and T500 under the company’s traditional costing system. (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.)
B300 T500 Total
Product margin

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.)
B300 T500 Total
Product margin

Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations to 2 decimal places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.)
B300 T500 Total
% of % of
Amount Amount Amount
Traditional Cost System
% %
% %
% %
Total cost assigned to products
Total cost
B300 T500 Total
% of % of
Amount Total Amount Amount Total Amount Amount
Activity-Based Costing System
Direct costs:
% %
% %
% %
Indirect costs:
% %
% %
% %
Total cost assigned to products
Costs not assigned to products:
Total cost

In: Accounting

Hi-Tek Manufacturing, Inc., makes two types of industrial component parts—the B300 and the T500. An absorption...

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
Sales $ 1,753,500
Cost of goods sold 1,239,487
Gross margin 514,013
Selling and administrative expenses 590,000
Net operating loss $ (75,987 )

Hi-Tek produced and sold 60,100 units of B300 at a price of $21 per unit and 12,600 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:

B300 T500 Total
Direct materials $ 400,400 $ 162,100 $ 562,500
Direct labor $ 120,800 $ 42,500 163,300
Manufacturing overhead 513,687
Cost of goods sold $ 1,239,487

The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek’s ABC implementation team concluded that $52,000 and $110,000 of the company’s 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 company’s manufacturing overhead to four activities as shown below:

Manufacturing
Overhead		 Activity
Activity Cost Pool (and Activity Measure) B300 T500 Total
Machining (machine-hours) $ 203,357 90,400 62,500 152,900
Setups (setup hours) 148,830 73 290 363
Product-sustaining (number of products) 101,400 1 1 2
Other (organization-sustaining costs) 60,100 NA NA NA
Total manufacturing overhead cost $ 513,687

Required:

1. Compute the product margins for the B300 and T500 under the company’s traditional costing system.

2. Compute the product margins for B300 and T500 under the activity-based costing system.

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

Compute the product margins for the B300 and T500 under the company’s traditional costing system. (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.)

Requirement 1
B300 T500 Total
Product margin

Requirement 2

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.)
B300 T500 Total
Product margin
  • Required 3

Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations to 2 decimal places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.)
B300 T500 Total
% of % of
Amount Amount Amount
Traditional Cost System
% %
% %
% %
Total cost assigned to products
Total cost
B300 T500 Total
% of % of
Amount Total Amount Amount Total Amount Amount
Activity-Based Costing System
Direct costs:
% %
% %
% %
Indirect costs:
% %
% %
% %
Total cost assigned to products
Costs not assigned to products:
Total cost

In: Accounting

Hi-Tek Manufacturing, Inc., makes two types of industrial component parts—the B300 and the T500. An absorption...

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
Sales $ 1,635,200
Cost of goods sold 1,229,043
Gross margin 406,157
Selling and administrative expenses 600,000
Net operating loss $ (193,843 )

Hi-Tek produced and sold 60,200 units of B300 at a price of $19 per unit and 12,600 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:

B300 T500 Total
Direct materials $ 400,600 $ 162,300 $ 562,900
Direct labor $ 120,800 $ 42,100 162,900
Manufacturing overhead 503,243
Cost of goods sold $ 1,229,043

The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek’s ABC implementation team concluded that $55,000 and $107,000 of the company’s 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 company’s manufacturing overhead to four activities as shown below:

Manufacturing
Overhead		 Activity
Activity Cost Pool (and Activity Measure) B300 T500 Total
Machining (machine-hours) $ 200,823 90,800 62,500 153,300
Setups (setup hours) 139,920 78 240 318
Product-sustaining (number of products) 101,800 1 1 2
Other (organization-sustaining costs) 60,700 NA NA NA
Total manufacturing overhead cost $ 503,243

Required:

1. Compute the product margins for the B300 and T500 under the company’s traditional costing system.

2. Compute the product margins for B300 and T500 under the activity-based costing system.

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

Compute the product margins for the B300 and T500 under the company’s traditional costing system. (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.)
B300 T500 Total
Product margin

$0

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.)
B300 T500 Total
Product margin $0

Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations to 2 decimal places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.)
B300 T500 Total
% of % of
Amount Amount Amount
Traditional Cost System
% %
% %
% %
Total cost assigned to products $0 $0 $0
Total cost $0
B300 T500 Total
% of % of
Amount Total Amount Amount Total Amount Amount
Activity-Based Costing System
Direct costs:
% %
% %
% %
Indirect costs:
% %
% %
% %
Total cost assigned to products $0 $0 0
Costs not assigned to products:
Total cost $0

In: Accounting

Hi-Tek Manufacturing, Inc., makes two types of industrial component parts—the B300 and the T500. An absorption...

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
Sales $ 1,714,000
Cost of goods sold 1,224,462
Gross margin 489,538
Selling and administrative expenses 630,000
Net operating loss $ (140,462 )

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 $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 $ 162,800 $ 563,500
Direct labor $ 120,600 $ 43,000 163,600
Manufacturing overhead 497,362
Cost of goods sold $ 1,224,462

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 $101,000 of the company’s 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 company’s manufacturing overhead to four activities as shown below:

Manufacturing
Overhead		 Activity
Activity Cost Pool (and Activity Measure) B300 T500 Total
Machining (machine-hours) $ 205,422 90,600 62,700 153,300
Setups (setup hours) 131,040 72 240 312
Product-sustaining (number of products) 100,400 1 1 2
Other (organization-sustaining costs) 60,500 NA NA NA
Total manufacturing overhead cost $ 497,362

Required:

1. Compute the product margins for the B300 and T500 under the company’s traditional costing system.

2. Compute the product margins for B300 and T500 under the activity-based costing system.

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

Compute the product margins for the B300 and T500 under the company’s traditional costing system. (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.)
B300 T500 Total
Product margin $0

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.)
B300 T500 Total
Product margin $0

Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations to 2 decimal places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.)
B300 T500 Total
% of % of
Amount Amount Amount
Traditional Cost System
% %
% %
% %
Total cost assigned to products $0 $0 $0
Total cost $0
B300 T500 Total
% of % of
Amount Total Amount Amount Total Amount Amount
Activity-Based Costing System
Direct costs:
% %
% %
% %
Indirect costs:
% %
% %
% %
Total cost assigned to products $0 $0 0
Costs not assigned to products:
Total cost $0

In: Accounting

Hi-Tek Manufacturing, Inc., makes two types of industrial component parts—the B300 and the T500. An absorption...

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
Sales $ 1,706,000
Cost of goods sold 1,219,035
Gross margin 486,965
Selling and administrative expenses 580,000
Net operating loss $ (93,035 )

Hi-Tek produced and sold 60,100 units of B300 at a price of $20 per unit and 12,600 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 $ 400,600 $ 162,900 $ 563,500
Direct labor $ 120,800 $ 42,300 163,100
Manufacturing overhead 492,435
Cost of goods sold $ 1,219,035

The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek’s ABC implementation team concluded that $53,000 and $103,000 of the company’s 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 company’s manufacturing overhead to four activities as shown below:

Manufacturing
Overhead		 Activity
Activity Cost Pool (and Activity Measure) B300 T500 Total
Machining (machine-hours) $ 202,825 90,500 62,000 152,500
Setups (setup hours) 127,510 71 240 311
Product-sustaining (number of products) 101,800 1 1 2
Other (organization-sustaining costs) 60,300 NA NA NA
Total manufacturing overhead cost $ 492,435

Required:

1. Compute the product margins for the B300 and T500 under the company’s traditional costing system.

2. Compute the product margins for B300 and T500 under the activity-based costing system.

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

Compute the product margins for the B300 and T500 under the company’s traditional costing system. (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.)
B300 T500 Total

Product margin

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" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.)
B300 T500 Total
% of % of
Amount Amount Amount
Traditional Cost System
% %
% %
% %
Total cost assigned to products $0 $0 $0
Total cost $0
B300 T500 Total
% of % of
Amount Total Amount Amount Total Amount Amount
Activity-Based Costing System
Direct costs:
% %
% %
% %
Indirect costs:
% %
% %
% %
Total cost assigned to products $0 $0 0
Costs not assigned to products:
Total cost $0
B300 T500 Total
Product margin

In: Accounting

Hi-Tek Manufacturing, Inc., makes two types of industrial component parts—the B300 and the T500. An absorption...

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
Sales $ 1,705,300
Cost of goods sold 1,242,356
Gross margin 462,944
Selling and administrative expenses 600,000
Net operating loss $ (137,056 )

Hi-Tek produced and sold 60,500 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:

B300 T500 Total
Direct materials $ 400,900 $ 162,800 $ 563,700
Direct labor $ 120,200 $ 42,800 163,000
Manufacturing overhead 515,656
Cost of goods sold $ 1,242,356

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, 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:

Manufacturing
Overhead		 Activity
Activity Cost Pool (and Activity Measure) B300 T500 Total
Machining (machine-hours) $ 201,036 90,100 62,200 152,300
Setups (setup hours) 153,120 78 270 348
Product-sustaining (number of products) 101,400 1 1 2
Other (organization-sustaining costs) 60,100 NA NA NA
Total manufacturing overhead cost $ 515,656

Required:

1. Compute the product margins for the B300 and T500 under the company’s traditional costing system.

2. Compute the product margins for B300 and T500 under the activity-based costing system.

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

Compute the product margins for the B300 and T500 under the company’s traditional costing system. (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.)
B300 T500 Total
Product margin $0

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.)
B300 T500 Total
Product margin $0

Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations to 2 decimal places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.)
B300 T500 Total
% of % of
Amount Amount Amount
Traditional Cost System
% %
% %
% %
Total cost assigned to products $0 $0 $0
Total cost $0
B300 T500 Total
% of % of
Amount Total Amount Amount Total Amount Amount
Activity-Based Costing System
Direct costs:
% %
% %
% %
Indirect costs:
% %
% %
% %
Total cost assigned to products $0 $0 0
Costs not assigned to products:
Total cost $0

In: Accounting

Hi-Tek Manufacturing, Inc., makes two types of industrial component parts—the B300 and the T500. An absorption...

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
Sales $ 1,778,300
Cost of goods sold 1,235,069
Gross margin 543,231
Selling and administrative expenses 620,000
Net operating loss $ (76,769 )

Hi-Tek produced and sold 60,300 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 $ 400,100 $ 162,300 $ 562,400
Direct labor $ 120,600 $ 42,800 163,400
Manufacturing overhead 509,269
Cost of goods sold $ 1,235,069

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 $107,000 of the company’s 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 company’s manufacturing overhead to four activities as shown below:

Manufacturing
Overhead		 Activity
Activity Cost Pool (and Activity Measure) B300 T500 Total
Machining (machine-hours) $ 211,419 90,000 62,100 152,100
Setups (setup hours) 135,450 71 230 301
Product-sustaining (number of products) 101,800 1 1 2
Other (organization-sustaining costs) 60,600 NA NA NA
Total manufacturing overhead cost $ 509,269

Required:

1. Compute the product margins for the B300 and T500 under the company’s traditional costing system.

2. Compute the product margins for B300 and T500 under the activity-based costing system.

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

Compute the product margins for the B300 and T500 under the company’s traditional costing system. (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.)

Required 1:
B300 T500 Total
Product margin $0

Required 2:

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.)
B300 T500 Total
Product margin $0

Required 3:

Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations to 2 decimal places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.)
B300 T500 Total
% of % of
Amount Amount Amount
Traditional Cost System
% %
% %
% %
Total cost assigned to products $0 $0 $0
Total cost $0
B300 T500 Total
% of % of
Amount Total Amount Amount Total Amount Amount
Activity-Based Costing System
Direct costs:
% %
% %
% %
Indirect costs:
% %
% %
% %
Total cost assigned to products $0 $0 0
Costs not assigned to products:
Total cost

$0

In: Accounting

Hi-Tek Manufacturing, Inc., makes two types of industrial component parts—the B300 and the T500. An absorption...

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
Sales $ 1,699,200
Cost of goods sold 1,228,786
Gross margin 470,414
Selling and administrative expenses 590,000
Net operating loss $ (119,586 )

Hi-Tek produced and sold 60,000 units of B300 at a price of $20 per unit and 12,800 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:

B300 T500 Total
Direct materials $ 400,400 $ 162,200 $ 562,600
Direct labor $ 120,000 $ 42,600 162,600
Manufacturing overhead 503,586
Cost of goods sold $ 1,228,786

The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek’s ABC implementation team concluded that $52,000 and $109,000 of the company’s 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 company’s manufacturing overhead to four activities as shown below:

Manufacturing
Overhead		 Activity
Activity Cost Pool (and Activity Measure) B300 T500 Total
Machining (machine-hours) $ 212,106 90,900 62,800 153,700
Setups (setup hours) 130,380 78 240 318
Product-sustaining (number of products) 100,200 1 1 2
Other (organization-sustaining costs) 60,900 NA NA NA
Total manufacturing overhead cost $ 503,586

Required:

1. Compute the product margins for the B300 and T500 under the company’s traditional costing system.

2. Compute the product margins for B300 and T500 under the activity-based costing system.

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

Compute the product margins for the B300 and T500 under the company’s traditional costing system. (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.)
B300 T500 Total
Product margin $0

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.)
B300 T500 Total
Product margin

$0

Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations to 2 decimal places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.)
B300 T500 Total
% of % of
Amount Amount Amount
Traditional Cost System
% %
% %
% %
Total cost assigned to products $0 $0 $0
Total cost $0
B300 T500 Total
% of % of
Amount Total Amount Amount Total Amount Amount
Activity-Based Costing System
Direct costs:
% %
% %
% %
Indirect costs:
% %
% %
% %
Total cost assigned to products $0 $0 0
Costs not assigned to products:
Total cost $0

In: Accounting