Wadsworth Industries Manufactures Small Appliances and Uses an Activity-Based Costing

Multiple Choice

Wadsworth Industries manufactures small appliances and uses an activity-based costing system. Information from its system for the year for all products follows: Wadsworth makes 775 of its stand mixers a year, which requires a total of 25 machine hours, 10 inspection hours, and 12 orders. The stand mixer requires $15.00 in direct materials per unit and $11.50 in direct labor per unit. The stand mixer sells for $120 per unit. What is the product margin in total for the stand mixer?

A) $91,979.50
B) $26.50
C) $20,537.50
D) $71,468.50