Question

# Radakovich Corporation has provided the following data from its activity-based costing system: Activity Cost Pools Total...

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

 Activity Cost Pools Total Cost Total Activity Assembly \$ 1,341,408 62,800 machine-hours Processing orders \$ 67,522 2,450 orders Inspection \$ 123,120 1,620 inspection-hours

The company makes 440 units of product F60N a year, requiring a total of 1,830 machine-hours, 106 orders, and 37 inspection-hours per year. The product's direct materials cost is \$52.67 per unit and its direct labor cost is \$12.32 per unit. The product sells for \$181.00 per unit.

According to the activity-based costing system, the product margin for product F60N is: (Round your intermediate calculations to 2 decimal places.)

\$9,034.24

\$9,143.60

\$6,222.24

\$51,044.40

 Calculation of product margin for product F60N Particulars total cost (1) Total activity (2) Cost per activity (1)/(2) =(3) no of product F60N(4) total cost (3)*(4) Assembly 1341408 62800 21.36 1830 39088.8 processing 67522 2450 27.56 106 2921.36 inspection 123120 1620 76 37 2812 44822.160 Overhead per unit = total cost/unit of product overhead per unit = 44822.160/440unit = 101.8685 Product cost per unit Direct material cost 52.67 Direct labour cost 12.32 Overhead cost 101.8685 total product cost p.u 166.8585 Product cost = 440 unit * 166.8585= 73417.74 Sale price = 440 unit * 181 = 79640 Product margin = Sale price - product cost product Margin = 79640-73417.74= 6222.26 , i.e approx 6222.24 Option 6222.24 Option is correct as per the above calculation