Kraska Corporation has provided the following data from its activity-based costing system:
According to the activity-based costing system, the product margin for product O11W is:
A) $4,651.80
B) $1,688.10
C) $17,934.00
D) $3,956.10

Question

Kraska Corporation has provided the following data from its activity-based costing system: 
According to the activity-based costing system, the product margin for product O11W is:
A) $4,651.80 
B) $1,688.10 
C) $17,934.00 
D) $3,956.10

Quizplus · Accepted Answer

The product margin for product O11W can be calculated by subtracting the total cost driver rate per unit (calculated by dividing the total cost driver cost by the total number of cost driver units) from the product selling price per unit. 
For O11W: 
Product selling price per unit = $89.00 
Total cost driver rate per unit = $87.12 
Product margin = $89.00 - $87.12 = $1.88 
Product margin per unit = $1.88 x 900 = $1,688.10

Kraska Corporation Has Provided the Following Data from Its Activity-Based