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Handal 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
Handal 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 $15,800 S6,400 $9,800 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 04 Product Si MHs (Machining) 4,800 15,200 Orders (Order Filling) 300 1,700 Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins Product O4 Product S1 Sales Direct materials Direct labor S 70,200 112,200 S 23,900 S 44,300 S 38,900 S 46,700 Required: 1) What is the overhead cost assigned to Product S1 under activity-based costing? (Show your work.) A) $12,008 B) $16,000 C) $5,440 D) $17,448 2) What is the product margin for Product S1 under activity-based costing? (Show your work.) A) $17,592 B) $29,800 C) $3,752 D) $21,200
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