Wadsworth Industries manufactures small appliances and uses an activity-based
costing system. Information from its system for the year for all products follows:
Activity cost pool Total Cost Total Activity
Assembly 460,000 23,000 machine hours
Inspection 297,500 8,500 inspection hours
Packaging 19,200 1,600 orders
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 profit margin in total for the stand mixer?
A. $26.50
B. $20,537.50
C. $71,468.50
D. $91,979.50