Spendlove Corporation has provided the following data from its activity-based co

Question

Spendlove Corporation has provided the following data from its activity-based costing system:

The company makes 600 units of product S78N a year, requiring a total of 2,030 machine-hours, 108 orders, and 33 inspection-hours per year. The product's direct materials cost is $52.59 per unit and its direct labor cost is $19.32 per unit. The product sells for $175.60 per unit.

According to the activity-based costing system, the product margin for product S78N is: (Round your intermediate calculations to 2 decimal places.)

$10,561.96

$62,214.00

$8,086.96

$11,303.20

Spendlove Corporation has provided the following data from its activity-based costing system:

Explanation / Answer

The correct option is $ 8,086.96

Overhead cost for S78N

Computation of product margin for S78N

Predetermined rate per activity base Volume of activity consumed Overhead cost Assembly $ 23.86 2,030 machine hours $ 48,435.80 Processing orders $ 29.78 108 orders $ 3,216.24 Inspection $ 75 33 inspection hours $ 2,475 Total overhead cost $ 54,127.04

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