Question
Spendlove Corporation makes ten different products. The company has provided the following data from its activity-based costing system for all ten products: Activity Cost Pool
Spendlove Corporation makes ten different products. The company has provided the following data from its activity-based costing system for all ten products:
Activity Cost Pool | Total Cost | Total Activity |
Assembly | $1,114,920 | 57,000 machine-hours |
Processing orders | $47,016 | 1,800 orders |
Inspection | $107,328 | 1,560 inspection-hours |
One of the ten products is product S78N. The company makes and sells 450 units of product S78N a year, requiring a total of 1,120 machine-hours, 40 orders, and 30 inspection-hours per year for product S78N.
Product S78N's direct materials cost is $49.81 per unit and its direct labor cost is $12.34 per unit. The product sells for $128.00 per unit.
According to the activity-based costing system, the product margin for product S78N would be closest to:
$29,632.50
$4,616.50
$32,584.00
$5,471.50
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started