Stroth Corporation uses activity-based costing to compute product margins.Overhead costs have already been allocated to the company's three activity cost pools-Machining, Order Filling, and Other.The costs in those activity cost pools appear below: Machining costs are assigned to products using machine-hours (MHs)and Order Filling costs are assigned to products using the number of orders.The costs in the Other activity cost pool are not assigned to products.Activity data appear below: Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins. What is the product margin for Product C4 under activity-based costing?
A)$2, 958
B)-$1, 000
C)$9, 500
D)$4, 208

Question

Stroth Corporation uses activity-based costing to compute product margins.Overhead costs have already been allocated to the company's three activity cost pools-Machining, Order Filling, and Other.The costs in those activity cost pools appear below:  Machining costs are assigned to products using machine-hours (MHs)and Order Filling costs are assigned to products using the number of orders.The costs in the Other activity cost pool are not assigned to products.Activity data appear below:  Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins.  What is the product margin for Product C4 under activity-based costing?
A)$2, 958 
B)-$1, 000 
C)$9, 500 
D)$4, 208

Quizplus · Accepted Answer

The Answer of Stroth Corporation uses activity-based costing to compute product margins.Overhead costs have already been allocated to the company's three activity cost pools-Machining, Order Filling, and Other.The costs in those activity cost pools appear below:  Machining costs are assigned to products using machine-hours (MHs)and Order Filling costs are assigned to products using the number of orders.The costs in the Other activity cost pool are not assigned to products.Activity data appear below:  Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins.  What is the product margin for Product C4 under activity-based costing?
A)$2, 958 
B)-$1, 000 
C)$9, 500 
D)$4, 208

Stroth Corporation Uses Activity-Based Costing to Compute Product Margins