Hopscotch Limited, a manufacturer of a variety of products, uses an activityminusbased costing system. Information from its system for the year for all products follows: Activity cost pool Total cost Total activity Assembly $583,700 24,000 machineminushours Inspection $342,000 7,500 inspectionminushours Packaging $24,500 1,200 order Hopscotch Limited makes 440 of its product B63 a year, which requires a total of 33 machine hours, 13 inspection hours, and 17 orders. Product B63 requires $52.70 in direct materials per unit and $62.20 in direct labor per unit. Product B63 sells for $255 per unit.
What is the profit margin in total for Product B63? (Round all answers to two decimal places.)

Profit margin= $58,581.5

Explanation:

Giving the following information:

Activity cost pool Total cost Total activity

Assembly $583,700 24,000 machine-hours

Inspection $342,000 7,500 inspection-hours

Packaging $24,500 1,200 order

B63:

n= 440

33 machine-hours

13 inspection hours

17 orders.

Product B63 requires $52.70 in direct materials per unit and $62.20 in direct labor per unit. Product B63 sells for $255 per unit.

First, we need to calculate the estimated overhead rate for each activity pool:

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Assembly:

Estimated manufacturing overhead rate= 583,700/24,000= 24.32 per machine-hour

Inspection:

Estimated manufacturing overhead rate= 342,000/7,500= $45.6 per inspection

Packaging:

Estimated manufacturing overhead rate= 24,500/1,200= $20.42 per order

Now, we need to allocate the overhead  to product B63:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= (24.32*33) + (45.6*13) + (20.42*17)= $1,742.5

Total cost= direct material + direct labor + allocated overhead

Total cost= (52.7*440) + (62.20*440) + 1,742.5= $52,298.5

Profit margin= 440*252 - 52,298.5= $58,581.5

support your answer using the data presented. (5 points). 4. based on the information you used to schedule and curve, which product would you recommend the shoe hut focus on, and why? provide details that support your answer. (5 points).