8. Encarnacion Corporation has an activity-based costing system with three activity cost pools-Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow:

Overhead costs: Equipment expense............... $77,000 Indirect labor.......................... $8,000

Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools Processing Supervising Other Equipment expense 0.40 0.20 0.40 Indirect labor 0.30 0.20 0.50

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

Activity: MHs(Processing) Batches(Supervising) Product Z1 8000 700 Product C6 12000 300 Total 20000 1000

Finally, the costs of Processing and Supervising are combined with the following sales and direct cost data to determine product margins

Sales and Direct Cost Data: Product Z1 Product C6 Sales (total) $225100 154100 Direct materials(total) 122500 51000 Direct labor(total) 71100 72400

What is the product margin for Product C6 under activity-based costing?

$5,680

$41,700

$30,700

$12,480