HiTek Manufacturing Inc makes two types of industrial compon

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 Cost of goods sold Oross margin Selling and administrative expenses Net operating loss $ 1,635, 200 1,235,307 399,893 600,000 (200,107) 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 401,000 T500 Total Direct materials Direct labor Manufacturing overhead Cost of goods sold 162,500 $563,500 162,300 509,507 1,235, 307 $ 120,100 42,200 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 $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 alsco distributed the company\'s manufacturing overhead to four activities as shown below:

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Overhead Allocation - Traditional Costing System
Particulars	B300	T500	Total
Estimated annual Production (In units)	60200	12600
Direct Labor Cost	$120,100	$42,200	$162,300
Overhead Cost Allocation basis direct labour dollar (Overhead / Total direct labor dollar * Labor dollar of model)	$377,029	$132,478	$509,507
Manufacturing overhead cost per unit (Allocated Overhead / Nos of units)	$6.26	$10.51