1. Calculate activity rates for each activity cost pool using activity-based costing (ABC).
2. Determine the amount of overhead cost that would be assigned to each product using activity-based costing (ABC).
3. Determine the product margins for each product using activity-based costing (ABC).
    

Vassallo Corporation's activity-based costing system has three cost pools: Machining, Set Up, and other. The company's overhead costs, which consist of equipment depreciation and indirect labor, are allocated to the cost pools in proportion to the activity cost pools' consumption of resources. Equipment depreciation Indirect labor Distribution of Resource Consumption by Cost Pool Set Up $19,200 400 Equipment depreciation Indirect labor Total Product R3 Product D6 Machining $12,800 2,000 $14,800 Sales Direct materials Direct labor $64,000 4,000 Costs in the Machining 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. MHS 3,800 16,200 Other $32,000 1.600 $19,600 $33,600 Batches 300 700 Additional data concerning the company's products appears below: Product R3 Product D6 $168,700 $185,600 77,800 72,300 75,800 79,300 Total $64,000 4,000 $68,000