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Flemming Corporation uses activity-based costing to compute product margins. Overhead costs have already been allocated to the company's three activity cost pools--Machining, Order Filling,
Flemming Corporation uses activity-based costing to compute product margins. Overhead costs have already been allocated to the company's three activity cost pools--Machining, Order Filling, and Other. The costs in those activity cost pools appear below: Machining Order Filling Other $20,900 $22,900 $29,200 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 appear below: Product U6 Product Z8 MHS (Machining) 9,600 Orders (Order Filling) 600 400 400 Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins. Sales (total) Direct materials (total) Product U6Product Z8 $185,100 $178,100 $ 56,600 $ 98,600 Direct labor (total) $ 83,400 $ 63,700 The activity rate for Machining under activity-based costing is closest to:
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