TB MC Qu. 7-161 Handal Corporation uses activity-based ...

Handal 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 costs in those activity cost pools appear below:

Machining	$	15,800
Order Filling	$	6,400
Other	$	9,800

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 O4	4,800	300
Product S1	15,200	1,700

Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins.

	Product O4		Product S1
Sales (total)	$	70,200	$	112,200
Direct materials (total)	$	23,900	$	44,300
Direct labor (total)	$	38,900	$	46,700

What is the product margin for Product S1 under activity-based costing?

Multiple Choice

• $17,592

• $29,800

• $3,752

• $21,200