Donnati Corporation has provided the following data from its activity-based costing system: Activity Cost Pool Total Cost Total Activity Assembly $ 448,880 24,800 machine-hours Processing orders $ 95,240 2,000 orders Inspection $ 147,510 1,980 inspection-hours Data concerning one of the company's products, Product A43V, appear below: Selling price per unit $ 128.20 Direct materials cost per unit $ 22.44 Direct labor cost per unit $ 46.31 Annual unit production and sales 390 Annual machine-hours 500 Annual orders 170 Annual inspection-hours 46 According to the activity-based costing system, the product margin for Product A43V is:
Activity rate: | ||
Assembly | 18.10 | =448880/24800 |
Processing orders | 47.62 | =95240/2000 |
Inspection | 74.50 | =147510/1980 |
Sales revenue | 49998.00 | =390*128.20 |
Less: Costs | ||
Direct materials cost | 8751.60 | =390*22.44 |
Direct labor cost | 18060.90 | =390*46.31 |
Assembly | 9050.00 | =500*18.10 |
Processing orders | 8095.40 | =170*47.62 |
Inspection | 3427.00 | =46*74.50 |
Total Costs | 47384.90 | |
Product margin for Product A43V | 2613.10 | |
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