Rosenbrook Corporation has provided the following data from its activity-based c

Question

Rosenbrook Corporation has provided the following data from its activity-based costing system: Activity Cost Pool Total Cost Total Activity $710,770 37,000 machine-hours $39,690 1,800 orders $119,116 1,940 inspection-hours Inspection Data concerning one of the company's products, Product H73N, appear below: Selling price per unit. Direct materials cost per unit Direct labor cost per unit.... Annual unit production and sales Annual machine-hours Annual orders... $125.10 $34.94 $49.21 460 510 80 10 .. on-hours... According to the activity-based costing system, the product margin for product H73N (select the closest answer) is: $7,275.90 $6,661.90 $18,837.00 $8,425.90

Explanation / Answer

Calculate activity rate :

Assembly = 710770/37000 = 19.21 per machine hour

Processing order = 39690/1800 = 22.05 per order

Inspection = 119116/1940 = 61.40 per inspection

Calculate product margin :

So answer is b) $6661.90

Sales (460*125.10) 57546 Direct material (460*34.94) -16072.40 Direct labour (460*49.21) -22636.60 Asssemly (510*19.21) -9797.10 Processing order (80*22.05) -1764 Inspection (10*61.40) -614 Total cost 50884.10 Product margin 6661.90

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