Koutz Corporation Uses Activity-Based Costing to Compute Product Margins

question 25

Multiple Choice

Koutz Corporation uses activity-based costing to compute product margins.Overhead costs have already been allocated to the company's three activity cost pools-Processing, Supervising, and Other.The costs in those activity cost pools appear below: Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches.The costs in the Other activity cost pool are not assigned to products.Activity data appear below: Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins. What is the product margin for Product O7 under activity-based costing?

• A)$46, 400
• B)$10, 111
• C)-$600
• D)$14, 271

---

Definitions:

Orbicularis Oris

A complex of muscles in the face that encircles the mouth, controlling movements like closing or puckering the lips.

Buccinator

A muscle of the cheek that acts to compress the cheek against the teeth and is used in blowing and sucking motions.

Medial Excursion

Medial excursion is the movement of a body part toward the median plane of the body, often used to describe movements of the jaw or limbs.

Lateral Excursion

Refers to the side-to-side movement of the mandible, common in chewing actions.