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Question(s) / Instruction(s):

A corporation has provided the following data from its activity-based costing system:

Activity Cost Pool             Total Cost            Total Activity

Assembly                              $613,250                  55,000             machine-hours

Processing orders            $46,170        1,500              orders

Inspection                           $146,110                       1,900            inspection-hours

Data concerning one of the companys products, Product W58B, appear below:

Selling price per unit                       $113.70

Direct materials cost per unit      $48.14

Direct labor cost per unit              $11.62

Annual unit production and sales     360

Annual machine-hours                  1,040

Annual orders                                   60

Annual inspection-hours              30

According to the activity-based costing system, the profit margin for product W58B is:

 a)           $3,668.60

 b)           $5,975.60

 c)           $5,515.40

 d)           $19,418.40

 

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