Koutz 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: Processing costs are assigned to products using machine-hours (MHs)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: Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins. What is the product margin for Product O7 under activity-based costing?
A)$46, 400
B)$10, 111
C)-$600
D)$14, 271

Question

Koutz 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:  Processing costs are assigned to products using machine-hours (MHs)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:  Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins.  What is the product margin for Product O7 under activity-based costing?
A)$46, 400 
B)$10, 111 
C)-$600 
D)$14, 271

Quizplus · Accepted Answer

The Answer of Koutz 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:  Processing costs are assigned to products using machine-hours (MHs)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:  Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins.  What is the product margin for Product O7 under activity-based costing?
A)$46, 400 
B)$10, 111 
C)-$600 
D)$14, 271

Koutz Corporation Uses Activity-Based Costing to Compute Product Margins