31.

Walsh Corporation has an activity-based costing system with three activity cost pools-Machining, Order Filling, and Other. In the first stage allocations, costs in the two overhead accounts, equipment depreciation and supervisory expense, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow:

Overhead costs:
Equipment depreciation	$	51,000
Supervisory expense	$	3,000

Distribution of Resource Consumption Across Activity Cost Pools:

	Activity Cost Pools
	Machining	Order Filling	Other
Equipment depreciation	0.40	0.10	0.50
Supervisory expense	0.20	0.30	0.50

Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow: Activity:

	MHs (Machining)	Orders (Order Filling)
Product J3	9,100	100
Product F7	900	900
Total	10,000	1,000

Finally, the costs of Machining and Order Filling are combined with the following sales and direct cost data to determine product margins. Sales and Direct Cost Data:

	Product J3		Product F7
Sales (total)	$	145,200	$	90,700
Direct materials (total)	$	81,400	$	38,600
Direct labor (total)	$	37,700	$	42,400

What is the product margin for Product F7 under activity-based costing?

Select one:

a.

$9,700

b.

$10,600

c.

$2,710

d.

$2,410