Flemming 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$20,900Order Filling$22,900Other$29,200Machining 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 U69,600600Product Z8400400Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins. Product U6Product Z8?Sales
(total)$185,100$178,100?Direct materials (total)$56,600$98,600?Direct labor (total)$83,400$63,700?What is the product margin for Product U6 under activity-based costing?
A. $45,100
B. $8,600
C. $25,036
D. $11,296
Answer: D
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