Quantum Corporation Has Provided the Following Data from Its Activity-Based

question 28

Multiple Choice

Quantum Corporation has provided the following data from its activity-based costing system: The company makes 430 units of product R32E a year,requiring a total of 1,120 machine-hours,40 orders,and 30 inspection-hours per year.The product's direct materials cost is $49.81 per unit and its direct labor cost is $12.34 per unit.The product sells for $129.90 per unit.According to the activity-based costing system,the product margin for product R32E is:

• A)$4,116.50
• B)$29,132.50
• C)$6,180.50
• D)$5,161.30
• E)$4,981.00

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Definitions:

Standard Labor-Hours

The estimated time that should be required to complete a single unit of production, serving as a benchmark for performance and cost control.

Overhead

The indirect costs of production or operations that are not directly traceable to a specific product or job, such as utilities, rent, and administrative expenses.

Machine-Hours

A measure of production activity that quantifies the total hours a machine is operated over a specific period.

Fixed Manufacturing Overhead

Indirect production costs that remain constant regardless of the volume of production, such as salaries of managers and depreciation of factory equipment.