Problem
That Other Corporation uses activity-based costing to compute product margins. Overhead costs have already been allocated to the company's three activity cost pools-Processing, Supervising, and Other. The costs in those activity cost pools appear below:
processing $4600
supervising $16500
other $14900
Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data appear below:
MH (Processing) Batches(supervising)
product Q7 4700 100
Product U8 5300 900
total 10000 1000
Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins.
Product Q7 Product U8
Sales (total) $82100 90700
direct materials (total) $48,600 48300
direct labor (total) $25,900 21200
What is the product margin for Product Q7 under activity-based costing?