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 $4,625
Supervising $31,500
Other $10,900
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 Batches
(Processing) (Supervising)
Product M0 12,000 750
Product M5 500 750
Total 12,500 1,500
Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins.
Product M0 Product M5
Sales (total) $79,600 $92,400
Direct materials (total) $29,000 $31,900
Direct labor (total) $28,300 $42,200
What is the overhead cost assigned to Product M5 under activity-based costing?
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