Goold Corporation Uses Activity-Based Costing to Compute Product Margins

question 58

Multiple Choice

Goold Corporation uses activity-based costing to compute product margins. Overhead costs have already been allocated to the company's three activity cost pools-Machining, Order Filling, and Other. The costs in those activity cost pools appear below: Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. 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 Machining and Order Filling costs to determine product margins.
-What is the product margin for Product R9 under activity-based costing?

• A)$3,576
• B)$4,200
• C)-$3,800
• D)$916

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Definitions:

Partners

Individuals or entities who share ownership and responsibilities in a business or venture.

Income

Monetary returns that come on a recurring basis, either from being employed or from putting money into investments.

Nash Equilibrium

A concept in game theory where each player's strategy is optimal, given the strategies of all other players in the game.

Payoff

An outcome of a decision or action, usually quantified in terms of profit, loss, or other benefits.