Cardio Care, Inc. manufactures stationary bicycles and treadmills. The products are produced in its Fabrication and Assembly

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Cardio Care, Inc. 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 .........................................................$27 per machine hour

Assembly .......................................................$11 per direct labor hour

Setup ................................................................................$52 per setup

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

Production scheduling ...................................$12 per production order

Purchasing ..........................................................$9 per purchase order

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

Activity Base Machine hours Direct labor hours Setups Inspections Production orders Purchase orders Units produced Stati


Use the activity rate and usage information to calculate the total activity cost and activity cost per unit for each product. If required, round the per unit answers to nearestcent.

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Financial and Managerial Accounting Using Excel for Success

ISBN: 978-1111993979

1st edition

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

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