Doede Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing system allocates two overhead accounts--equipment depreciation and supervisory expense--to three activity cost pools--Machining, Order Filling, and Other--based on resource consumption. Data to perform these allocations appear below:

Doede Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing system allocates two overhead accounts-equipment depreciation and supervisory expense-to three activity cost pools-Machining, Order Filling, and Other-based on resource consumption. Data to perform these allocations appear below: Overhead costs: Equipment depreciation $23,000 Supervisory expense $12,000 Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools Machining Order Filling Equipment depreciation Supervisory expense Other 0.20 0.30 0.60 0.20 0.10 0.60 In the second stage, 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: Orders (Order MHS (Machining) Filling) Product W1 6,250 145 Activity: Orders MHS (Order (Machining) Filling) Product W1 Product MO Total 6,250 23,400 29,650 145 1,000 1,145 Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins Sales and Direct Cost Data: Product Product MO Sales (total) Direct materials (total) Direct labor (total) W1 $67,200 $63,300 $31,700 $15,600 $23,100 $31,300 What is the product margin for Product W1 under activity-based costing? (Round your intermediate calculations to 2 decimal places.) Multiple Choice $2,213 $7,227 $11,787 $8,007