Accounting 70.pdf - 14 Award 10.00 points Required...

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14.Award: 10.00pointsProblems? Adjust credit for all students.Required informationKnowledge Check 01Product ASales$ 500,000Direct costs:Direct materials$ 175,000Direct labor$75,000Activity Cost PoolsTotal CostMachine-setups$20,000Special processing150,000General factory200,000Total overhead costs$370,000Overhead Cost for Product AActivity Cost Pool(a)Activity Rate(b)Activity(a) × (b)ABC CostMachine-setups$ 100per order100 setups$10,000 Special processing$15per design0 Designs0 General factory$10per machine-hour10,000 machine-hours100,000 Total$110,000 What is the product margin of Product A?$250,000$140,000$110,000$390,000Explanation:Knowledge Check 01The product profit margin is $140,000. This is calculated as the $500,000 sales minus $175,000 direct material minus $75,000 direct labor minus$110,000 overhead costs.
Multiple ChoiceDifficulty: 3 HardLearning Objective: 07-05 Use activity-based costing tocompute product and customer margins.References

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