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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 Supervising Other 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: Product Me Product M5 Total $ 4,500 $ 26,640 $ 11,700 MHS (Processing) 9,500 500 10,000 Sales (total) Direct materials (total) Direct labor (total) Batches (Supervising) 600 600 1,200 Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins. Product Me $ 83,100 $ 29,800 $ 29,100 Product M5 $ 96,400 $ 32,700 $ 43,000
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