Question

Accounting

Flemming 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$20,900
Order Filling$22,900
Other$29,200

 

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:

 


MHs (Machining)Orders (Order Filling)
Product U69,600600
Product Z8400400

 

Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins.

 


Product U6Product Z8
Sales (total)$185,100$178,100
Direct materials (total)$56,600$98,600
Direct labor (total)$83,400$63,700


 

The activity rate for Machining under activity-based costing is closest to:


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