Feldpausch Corporation has provided the following data from its activity-based costing system:. Activity Cost PoolTotal CostTotal Activity Assembly$ 1,137,36084,000machine-hours Processing orders$ 28,4791,100orders Inspection$ 97,1551,270inspection-hours
The company makes 470 units of product W26B a year, requiring a total of 660 machine-hours, 50 orders, and 40 inspection-hours per year. The product's direct materials cost is $40.30 per unit and its direct labor cost is $42.22 per unit. The product sells for $118.00 per unit.
According to the activity-based costing system, the product margin for product W26B is:. (Round your intermediate calculations and final answers to 2 decimal places.)

Feldpausch Corporation

According to the activity-based costing system, the product margin for product W26B is:

= $3,384.70

Explanation:

a) Data and Calculations:

Activity Cost Pool         Total Cost            Total Activity

Assembly                    $ 1,137,360           84,000  machine-hours

Processing orders         $ 28,479               1,100  orders

Inspection                       $ 97,155              1,270  inspection-hours

Overhead rate based on ABC:

Assembly = $13.54 ($ 1,137,360/84,000) per machine-hour

Processing orders = $25.89 ($ 28,479/ 1,100) per order

Inspection = $76.50 ($ 97,155/1,270) per inspection-hour

Product W26B

Number of units = 470

Requirements:

Machine-hours = 660

Orders = 50

Inspection-hours = 40

Product W26B Overhead Costs:

Assembly =               $8,936.40 (660 * $13.54)

Processing orders = $1,294.50 (50 * $25.89)

Inspection =             $3,060 (40 * $76.50)

Total overhead =   $13,290.90

Sales revenue ($118 * 470) =                       $55,460.00

Direct materials ($40.30 * 470) $18,941.00

Direct labor ($42.22 * 470)         19,843.40

Overhead costs =                        13,290.90 $52,075.30

Product margin =                                              $3,384.70

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