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or $96,500 A company produces and sells two products14,000 units of Product A and 6,000 units of Product B. The selling prices are $65 per
or $96,500
A company produces and sells two products14,000 units of Product A and 6,000 units of Product B. The selling prices are $65 per unit for Product A and $96 per unit for Product B. Product A's direct materials and direct labor costs per unit are $31 and $12. respectively. Product B's direct materials and direct labor costs per unit are $34 and $15, respectively. The company is considering Implementing an activity based costing (ABC) system that allocates all of its manufacturing overhead to three cost pools. The following additional information is available for the company as a whole and for Products A and B: Activity Cost Pool Machining Machine setups Product design Activity Measure Machine-hours $ Number of setups $ Number of products $ Estimated Overhead Cost 300,000 150,000 78,000 Expected Activity 20,000 MH 200 Setups 2 Products Activity Measure Machine-hours Number of setups Number of products Product A 9,000 5e Product B 6,000 150 1 1 Using the ABC system, what is the product margin for Product A? Multiple Choice $81,500 $54,500 $53,500Step by Step Solution
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