Mirabile Corporation uses activity-based costing to compute product margins. Overhead costs have already been allocated...
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Accounting
Mirabile 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
$
4,320
Supervising
$
33,040
Other
$
10,800
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:
MHs (Processing)
Batches (Supervising)
Product M0
11,400
700
Product M5
600
700
Total
12,000
1,400
Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins.
Product M0
Product M5
Sales (total)
$
78,800
$
91,900
Direct materials (total)
$
28,900
$
31,800
Direct labor (total)
$
28,200
$
42,100
The activity rate for the Supervising activity cost pool under activity-based costing is closest to:
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