Musich Corporation has an activity-based costing system with three activity cost pools--Machining, Setting Up, and Other. The company's overhead costs, which consist of equipment depreciation and indirect labor, have been allocated to the cost pools already and are provided in the table below.
Activity Cost Pools
Machining Setting Up Other Total Equipment depreciation $ 8800 $ 47,200 $ 23,200 $ 79,200
Indirect labor 3600 2600 3800 10,000
Total $ 12,400 $ 49,800 $ 27,000 $ 89,200
Costs in the Machining cost pool are assigned to products based on machine-hours (MHs) and costs in the Setting Up cost pool are assigned to products based on the number of batches. Costs in the Other cost pool are not assigned to products. Data concerning the two products and the company's costs appear below:
MHs Batches
Product Z3 5700 600
Product T1 5900 1200
Total 11,600 1800
Product Z3 Product T1
Sales (total) $ 224,800 $ 252,500
Direct materials (total) $ 82,500 $ 97,000
Direct labor (total) $ 109,400 $ 103,700
Required:
Calculate the following:
Machining Activity Rate $
Setting up Activity Rate $
Amount of OH applied to product Z3 (round to the nearest dollar) $
Amount of OH applied to product T1 (round to the nearest dollar) $
Product Margin – Z3 (round to the nearest dollar) $
Product Margin – T1 (round to the nearest dollar) $