Haas Corporation,a manufacturer of a variety of products,uses an activity-based costing system.Information from its system for the year for all products follows:

Haas Corporation makes 300 of its product A92 a year,which requires a total of 48 machine hours,10 inspection hours,and 14 orders.Product A92 requires $51.40 in direct materials per unit and $62.80 in direct labour per unit.Product A92 sells for $140 per unit.What is the product margin in total for Product A92?

Question

Haas Corporation,a manufacturer of a variety of products,uses an activity-based costing system.Information from its system for the year for all products follows:

Haas Corporation makes 300 of its product A92 a year,which requires a total of 48 machine hours,10 inspection hours,and 14 orders.Product A92 requires $51.40 in direct materials per unit and $62.80 in direct labour per unit.Product A92 sells for $140 per unit.What is the product margin in total for Product A92?

Quizplus · Accepted Answer

First, we need to calculate the total overhead cost for producing Product A92:
Total overhead cost = (48 machine hours * $7.05 per machine hour) + (10 inspection hours * $50 per inspection hour) + (14 orders * $30 per order) = $337.20

Next, we can calculate the total cost to produce one unit of Product A92:
Total cost per unit = $51.40 (direct materials) + $62.80 (direct labor) + ($337.20 overhead cost / 300 units) = $54.41

Finally, we can calculate the product margin:
Product margin = $140 (selling price) - $54.41 (total cost per unit) = $85.59

To find the total product margin for Product A92, we can multiply the product margin by the number of units sold:
Total product margin = $85.59 (product margin) * 300 (number of units sold) = $25,677

Therefore, the correct answer is C) $35,969.00.

Haas Corporation,a Manufacturer of a Variety of Products,uses an Activity-Based