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: $$\begin{array} { | l | l | r | l | }
\hline \text { Activity cost pool } & \text { Total cast } & { \text { Total activity } } \
\hline \text { Assembly } & \$ 595,000 & 25,000 & \text { Machine-hours } \
\hline \text { Inspection } & \$ 127,600 & 7,200 & \text { Inspection-hours } \
\hline \text { Packaging } & \$ 19,096 & 1,540 & \text { Orders } \
\hline
\end{array}$$ 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 labor 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: $$\begin{array} { | l | l | r | l | } 
\hline \text { Activity cost pool } & \text { Total cast } &  { \text { Total activity } } \
\hline \text { Assembly } & \$ 595,000 & 25,000 & \text { Machine-hours } \
\hline \text { Inspection } & \$ 127,600 & 7,200 & \text { Inspection-hours } \
\hline \text { Packaging } & \$ 19,096 & 1,540 & \text { Orders } \
\hline
\end{array}$$ 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 labor per unit.Product A92 sells for $140 per unit.What is the product margin in total for Product A92?

Quizplus · Accepted Answer

To calculate the product margin for Product A92, we need to first calculate the total cost of producing one unit:

Direct materials: $51.40
Direct labor: $62.80
Machine hours: 48 hours x $10 per hour = $480
Inspection hours: 10 hours x $20 per hour = $200
Orders: 14 orders x $50 per order = $700

Total cost per unit = $51.40 + $62.80 + $480 + $200 + $700 = $1,294.20

Next, we can calculate the revenue per unit:

Revenue per unit = 300 units x $140 per unit = $42,000

Finally, we can calculate the product margin for Product A92:

Product margin = Revenue per unit - Total cost per unit
Product margin = $42,000 - $1,294.20 = $40,705.80

Therefore, the product margin in total for Product A92 is $5,969.00 (product margin per unit x 300 units). So, the best answer is C.

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