Answer:
The product margin for product W26B is $7,997
Explanation:
Activity Assembly $1,586,690 for 66,500 machine-hours
-> Activity Assembly $23.86 per one machine-hour (=$1586690/66500)
Processing orders $70,579 for 2,370 orders
-> Processing orders $29.78 per one order (=$70579/2370)
Inspection inspection $124,500 for 1,660 hours
-> Inspection inspection $75 per one hour (=$124500/1660)
The company makes 600 units of product W26B a year, requiring a total of 2,030 machine-hours, 108 orders, and 33 inspection-hours per year
Activity cost = $23.86 x 2,030 + $29.78 x 108 + $75 x 33 = $54,217
Material cost = $52.59 x 600 = $31,554
Direct labor cost = $19.32 X 600 = $11,592
Revenue for 600 units = $175.60 x 600 = $105,360
The product margin = revenue - all cost
= $105,360 - $54,217 - $31,554 - $11,592 = $7,997
