Question
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.
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$6,630Supervising$38,520Other$12,300
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 M012,300900Product M5700900Total13,0001,800
Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins.
Product M0Product M5Sales (total)$87,900$99,400Direct materials (total)$30,400$33,300Direct labor (total)$29,700$43,600
The activity rate for the Supervising activity cost pool under activity-based costing is closest to:
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