Mirabile Corporation uses activity-based costing to compute product margins. Ove
ID: 2339270 • Letter: M
Question
Mirabile Corporation uses activity-based costing to compute product margins. Overhead costs have already been allocated to the company's three activity cost pools-Processing, Supervising, and Other. The costs in those activity cost pools appear below: 2 Processing $4,988 Supervising $34,280 $11,200 Other 0154 18 Processing costs are assigned to products using machine-hours (Mi-Hs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data appear below tches Product M5 Total 14,eee 1,880 Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins Direct saterials (total) Direct labor (total) % 29, 3ee 32, 20e s 28,600 $ 42,see C Prev 7 10 Next >Explanation / Answer
Activity Cost Processing 4,900 Supervising 34,200 MHs Batches Product MA 13,300 900 Product MS 700 900 14,000 1800 Allocation rate Activity Cost Driver Allocation rate Processing 4,900 14,000 0.35 Supervising 34,200 1800 19.00 Supervising cost allocation MHs Allocation rate Supervising Product MA 900 19.00 17,100 Product MS 900 19.00 17,100 1,800 Processing cost allocation MHs Allocation rate Supervising Product MA 13,300 0.35 4,655 Product MS 700 0.35 245 14,000 4,900 Product MA Product MS Sale 81,000 93,900 Direct Material (29,300) (32,200) Direct labor (28,600) (42,500) Supervising cost (17,100) (17,100) Processing (4,655) (245) Margin 1,345 1,855