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Walsh Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing system allocates two overhead accounts-equipment expense and indirect labor-to

Walsh Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing system allocates two overhead accounts-equipment expense and indirect labor-to three activity cost pools-Processing, Supervising, and Other-based on resource consumption. Data to perform these allocations appear below:

Overhead costs:
Equipment expense $ 55,000
Indirect labor $ 7,000

Distribution of Resource Consumption Across Activity Cost Pools:

Activity Cost Pools
Processing Supervising Other
Equipment expense 0.10 0.70 0.20
Indirect labor 0.50 0.10 0.40

Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins. Activity:

MHs (Machining) Orders (Order Filling)
Product Q! 1,000 700
Product S6 19,000 1,300
Total 20,000 2,000

Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins. Sales and Direct Cost Data:

Product Q1 Product S6
Sales (total) $ 134,600 $ 186,300
Direct materials (total) $ 76,000 $ 64,800
Direct labor (total) $ 40,800 $ 78,400

What is the product margin for Product Q1 under activity-based costing?

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