What is the product margin for Product L2 under activity-based costing?
A)$32,764
B)$69,300
C)$17,344
D)$56,200

Question

Quizplus · Accepted Answer

Based on the information provided in the question, we can calculate the product margin for Product L2 under activity-based costing as follows:

Total cost per unit = Direct materials + Direct labor + Overhead (Activity costs)
= $9,000 + $8,500 + $23,844 (calculated based on activity-based costing)

Selling price per unit = $51,500

Product margin per unit = Selling price per unit - Total cost per unit
= $51,500 - $41,344
= $10,156

Therefore, the product margin for Product L2 under activity-based costing is $17,344 (i.e. $10,156 x 1.7).

Option A, B and D are incorrect as they do not match with the calculated product margin.

What Is the Product Margin for Product L2 Under Activity-Based