What Is the Product Margin for Product L2 Under Activity-Based

question 28

Multiple Choice

What is the product margin for Product L2 under activity-based costing?

• A)$32,764
• B)$69,300
• C)$17,344
• D)$56,200

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Definitions:

Discounts

are reductions from the usual cost of something, often used to prompt sales or as a negotiation tactic.

Allowances

Discounts or financial concessions given to customers, employees, or distributors as an incentive or for defective goods.

Cumulative Quantity Discounts

Price reductions applied to purchases based on the accumulated quantity bought over a specific time period, incentivizing larger orders.

Noncumulative Quantity Discounts

Price reductions given for a single purchase order rather than over a period of time, based on the quantity of goods purchased.