Hugle Corporation's activity-based costing system has three activity cost pools-Machining, Setting Up, and Other. The company's overhead costs have already been allocated to these cost pools as follows:

Hugle Corporation's activity-based costing system has three activity cost pools-Machining, Setting Up, and Other. The company's overhead costs have already been allocated to these cost pools as follows:

Machining	$	72,798
Setting up	$	119,978
Other	$	23,900

Costs in the Machining cost pool are assigned to products based on machine-hours (MHs) and costs in the Setting Up cost pool are assigned to products based on the number of batches. Costs in the Other cost pool are not assigned to products. The following table shows the machine-hours and number of batches associated with each of the company's two products:

	MHs	Batches
Product E8	2,580	1,330
Product V8	8,450	1,180
Total	11,030	2,510

Additional data concerning the company's products appears below:

	Product E8		Product V8
Sales (total)	$	273,000	$	273,000
Direct materials (total)	$	88,300	$	83,500
Direct labor (total)	$	99,400	$	66,300

Required:
a.	Calculate activity rates for each activity cost pool using activity-based costing. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

	Activity Rate
Machining	$	per MH
Setting up	$	per batch

b.	Determine the amount of overhead cost that would be assigned to each product using activity-based costing. (Omit the "$" sign in your response.)

	Product E8	Product V8
Machining	$	$
Setting up
Total	$	$

c.	Determine the product margins for each product using activity-based costing. (Omit the "$" sign in your response.)

	Product Margin
Product E8	$
Product V8	$

Explanation: a.
Computation of activity rates:

Activity Cost Pools	Total Cost		Total Activity		Activity Rate
Machining	$	72,798	11,030	MHs	$	6.60	per MH
Setting up	$	119,978	2,510	batches	$	47.80	per batch

b.
Assign overhead costs to products:
Overhead cost for Product E8:

	Activity Rate			Activity		ABC Cost
Machining	$	6.60	per MH	2,580	MHs	$	17,028
Setting up	$	47.80	per batch	1,330	batches		63,574
Total						$	80,602

Overhead cost for Product V8:

	Activity Rate			Activity		ABC Cost
Machining	$	6.60	per MH	8,450	MHs	$	55,770
Setting up	$	47.80	per batch	1,180	batches		56,404
Total						$	112,174

c.
Determine product margins:

	Product E8				Product V8
Sales			$	273,000			$	273,000
Direct materials	$	88,300			$	83,500
Direct labor		99,400				66,300
Machining		17,028				55,770
Setting up		63,574		268,302		56,404		261,974
Product margin			$	4,698			$	11,026