HealthTek Equipment Company manufactures stationary bicycles and treadmills. The products are produced in its Fabrication and Assembly

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HealthTek Equipment Company manufactures stationary bicycles and treadmills. The products are produced in its Fabrication and Assembly production departments. In addition to production activities, several other activities are required to produce the two products. These activities and their associated activity rates are as follows:

Activity Activity Rate

Fabrication ......$24 per machine hour

Assembly ........$10 per direct labor hour

Setup ........$50 per setup

Inspecting .......$24 per inspection

Production scheduling ...$11 per production order

Purchasing .......$ 8 per purchase order

The activity-base usage quantities and units produced for each product were as follows:


HealthTek Equipment Company manufactures stationary bicycles and


Use the activity rate and usage information to calculate the total activity cost and activity cost per unit for eachproduct.

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Accounting

ISBN: 9780538475006

24th Edition

Authors: Carl S Warren, James M Reeve, Jonathan Duchac

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