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Assignment Question for Chapter 7: PROBLEM 7-24 H.Tek Manufacturing Inc. makes two types of industrial componeat parts-the B300 and the T500. An absorption costing income statement for the most recent period is shown below. rw-1ex proauced and sold 70,000 units of B300 at a price of $20 per unit and 17,500 units of T 500 at a price of $40 per unit, The comipany's traditional cost 5yrtem allocates manufactaring overtiead to products using a ptantwide overhead rate and direct labour dollars as the atlocation base. Additionat information relating to the company's two product lines is shown below. The company has created an activityoased costing syatem to evaluate the prohtability of its products. H.Tek's ABC intplementation team concluded that 350,000 and $100,000 of the company's advertising expenses cotld be directly traced to Bjo0 and T S00, respectively: The remaindet of the selling and administrative expenses wete ofganizationsustaining in naturt. The ABC team also distributed the company's maaufacturing overhead to four activities as stions below: 1. Using [9 Exhibit 7-14 as a gaide, compute the product margins for the B300 and T500 under the corapany's traditional costing system. 2. Using Exhibit 7-12 as a zaide, compute the product mafgins for 8300 and T500 tinder the activitybased costing system. 3. Using [9] Exhibit 7-15 as a guide, prepare a geantitative coreparison of the traditional and activity based cost assignments. Exptais nty the traditional and activity based cost assiphments diger

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