2.Sam's Corporation has an activity-based costing system with three activity cost pools-Processing, Setting Up, and Other. The company's overhead costs, which consist of factory utilities and indirect labor, are allocated to the cost pools in proportion to the activity cost pools' consumption of resources. Costs in the Processing cost pool are assigned to products based on machine-hours (MHs) and costs in the Setting Up cost pool are assigned to products based on the number of batches. Costs in the Other cost pool are not assigned to products. Data concerning the two products and the company's costs and activity-based costing system appear below:

Factory Utilities

64,000

Indirect Labor

50,000

Distribution of Resource Consumption Across Activity Cost Pools

Processing

Setting up

Other

Factory Utilities

0.5

0.2

0.3

Indirect Labor

0.7

0.2

0.1

MHs

Batches

Product H5

1,000

300

Product V3

4,000

600

Total

5,000

900

Product H5

Product V3

Sales

300,000

298,000

Direct Materials

115,400

114,800

Direct Labor

65,400

35,600

Required:

a.Assign overhead costs to activity cost pools using activity-based costing.

b.Calculate activity rates for each activity cost pool using activity-based costing.

c.Determine the amount of overhead cost that would be assigned to each product using activity-based costing.

Determine the product margins for each product using activity-based costing.