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Doede Corporation uses activity - based costing to compute product margins. In the first stage, the activity - based costing system allocates two overhead accounts
Doede Corporation uses activitybased costing to compute product margins. In the first stage, the activitybased costing system allocates two overhead accountsequipment depreciation and supervisory expenseto three activity cost poolsMachining, Order Filling, and Otherbased on resource consumption. Data to perform these allocations appear below:
Overhead costs:
Equipment depreciation $
Supervisory expense $
Distribution of Resource Consumption Across Activity Cost Pools:
Activity Cost Pools
Machining Order Filling Other
Equipment depreciation
Supervisory expense
In the second stage, Machining costs are assigned to products using machinehours 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:
MHs Machining Orders Order Filling
Product W
Product M
Total
Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins.
Sales and Direct Cost Data:
Product W Product M
Sales total $ $
Direct materials total $ $
Direct labor total $ $
What is the product margin for Product W under activitybased costing?
Note: Round your intermediate calculations to decimal places.
Multiple Choice
$
$
$
$
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