3 chapt 4-5; 16/17

Wadsworth Industries manufactures small appliances and uses an activity-based

costing system. Information from its system for the year for all products follows:

Activity cost pool Total Cost Total Activity

Assembly 460,000 23,000 machine hours

Inspection 297,500 8,500 inspection hours

Packaging 19,200 1,600 orders

Wadsworth makes 775 of its stand mixers a year, which requires a total of 25 machine hours, 10 inspection hours, and 12 orders. The stand mixer requires $15.00 in direct materials per unit and $11.50 in direct labor per unit. The stand mixer sells for $120 per unit. What is the profit margin in total for the stand mixer?

A.

$26.50

B.

$20,537.50

C.

$71,468.50

D.

$91,979.50