Lake Corporation has an activity-based costing system with three activity costs pools- Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts- equipment expense and indirect labor-are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow:

Overhead costs:
Equipment expense $96,000
Indirect labor $4,000
Distribution of resource consumption across activity cost pools:

Processing (Activity Cost Pools) Supervising (Activity Cost Pools) Other (Activity Cost Pools)
Equipment expense 0.40 0.20 0.40
Indirect labor 0.30 0.50 0.20
Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the other activity cost pool are not assigned to products. Activity data for the company's two products follow:

Activity:

MHs (Processing) Batches (Supervising)
Product R4 6,800 400
Product L2 13,200 600
Total 20,000 1,000
Finally, the costs of Processing and Supervising are combined with the following sales and direct cost data to determine product margins.

Sales and direct cost data:

Product R4 Product L2
Sales (total) $234,600 $269,600
Direct materials (total) $81,100 $120,200
Direct labor (total) $116,600 $93,200
Required:

1. Assign overhead costs to the activity cost pools.

2. Calculate the activity rates for the activity cost pools.

3. Assign overhead costs to each product.

4. Prepare a product margin report showing the product margin of each product.