Brisky Corporation uses activity-based costing to compute product margins. In th

Question

Brisky Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing system allocates two overhead accounts-equipment depreciation and supervisory expense-to three activity cost pools-Machining, Order Filling, and Other-based on resource consumption. Data to perform these allocations appear below:

Activity Cost Pools

In the second stage, Machining 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.

27,350            

1,137             

Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins.

What is the product margin for Product I3 under activity-based costing? (Round your intermediate calculations to 2 decimal places and final answer to the nearest dollar amount.)

Brisky Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing system allocates two overhead accounts-equipment depreciation and supervisory expense-to three activity cost pools-Machining, Order Filling, and Other-based on resource consumption. Data to perform these allocations appear below:

Explanation / Answer

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