Handal 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$15,800Order Filling$6,400Other$9,800Machining 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: MHs (Machining)Orders (Order Filling)Product O44,800300Product S115,2001,700Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins. Product O4Product S1?Sales
(total)$70,200$112,200?Direct materials (total)$23,900$44,300?Direct labor (total)$38,900$46,700?What is the product margin for Product S1 under activity-based costing?
A. $17,592
B. $21,200
C. $29,800
D. $3,752
Answer: D
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