According to the activity-based costing system, the product margin for product Athena is: A. $19,418.40 B. $6,224.60 C. $5,975.60 D. $5,515.40 E. None of the above

Incomplete question:

The missing part of the question is here below:

Jennings Corporation has provided the following data from its activity based costing system.

Activity Cost Pool Total Cost Total Activity

Assembly $613,250 55,000 machine-hours

Processing Orders $46,170 1500 orders

Inspection $146,110 1,900 inspection-hours

Data concerning one of the company's products, product Athena appear below:

Selling price $120.80 per unit

Direct material cost $48.14 per unit

Direct labour cost $11.62 per unit

Annual production & sales 360 units

Annual machine-hours 1040

Annual orders 60 times

Annual inspection hours 30 hours

Answer : $6,224.60 (B)

$ $

Sales ($120.80*360) 43,488

Prime cost:

Direct Materials (48.14*360) 17,330.4

Direct labours (11.62*360) 4183.2 21,513.6

Contribution 21,974.4

Overhead Costs:

Assembly (11.15*1040) 11,596

Processing Order (30.78*60) 1846.8

Inspection costs (76.9*30) 2307 (15,749.8)

Margin 6224.6

Margin/unit = 6224.6/360 ⇒ $17.29

Explanation:

Workings

Overhead Absorption Rate (OAR) = Total cost pool/Total Activity

-Assembly cost = 613,250/55,000 = $ 11.15/hr

-Processing Orders = 46,170/1500 = $30.78/order

-Inspection = 146,110/1900 = $76.9/hr