PROBLEM 3: XYZ Corporation uses activity-based costing to compute product margins. Overhead costs have already been allocated to the company's three activity cost pools--Machining, Order Filling, and Other. The overhead costs in those activity cost pools appear below:

Overhead costs
Machining	$	20,900
Order Filling	$	22,900
Other	$	29,200

Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products.

Activity data appear below:

	MHs (Machining)	Orders (Order Filling)
Product U6	9,600	600
Product Z8	400	400

Finally, sales and direct cost data needed to compute the product margins is given below:

	Product U6		Product Z8
Sales (total)	$	185,100		$	178,100
Direct materials (total)	$	56,600		$	98,600
Direct labor (total)	$	83,400		$	63,700

Show your work for each part of the question below:

a. What is the activity rate for machining under ABC accounting? $___________

b. What is the activity rate for order filling under ABC accounting? $___________

c. What is the overhead cost assigned to Product U6 under activity-based costing?

1. $36,500
2. $20,064
3. $33,804
4. $13,740

d. What is the product margin for Product U6 under activity-based costing? Show your work by preparing a management report for Product U6.