Mirabile Corporation uses activity-based costing to compute product margins. Overhead costs have already been allocated to the company's three activity cost pools--Processing, Supervising, and Other. The costs in those activity cost pools appear below:

Processing	$	4,025
Supervising	$	30,420
Other	$	10,700

Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data appear below:

	MHs (Processing)	Batches (Supervising)
Product M0	10,900	650
Product M5	600	650
Total	11,500	1,300

Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins.

	Product M0		Product M5
Sales (total)	$	78,000	$	91,400
Direct materials (total)	$	28,800	$	31,700
Direct labor (total)	$	28,100	$	42,000

What is the product margin for Product M5 under activity-based costing?

Multiple Choice

• $17,700

• $2,075

• $2,280

• $21,100