Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. mirabile corporation uses activity-based costing t

Mirabile Corporation uses activity-based costing to compute product margins. Overhead costs have already been allocated...

60.1K

Verified Solution

Question

Accounting

Mirabile 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 $ 6,250
Supervising $ 36,040
Other $ 12,200

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:

MHs (Processing) Batches (Supervising)
Product M0 11,800 850
Product M5 700 850
Total 12,500 1,700

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

Product M0 Product M5
Sales (total) $ 87,100 $ 98,900
Direct materials (total) $ 30,300 $ 33,200
Direct labor (total) $ 29,600 $ 43,500

What is the product margin for Product M5 under activity-based costing?

Multiple Choice

$27,200

$22,200

$3,830

$3,280

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students