Anderson, Inc., had the following environmental activities and product information:

Required:
1. Calculate the activity rates that will be used to assign environmental costs to products.
2. Determine the unit environmental and unit costs of each product using ABC.
3. What ifthe design costs increased to $240,000 and the cost of toxic waste decreased to $500,000? Assume that Solvent Y uses 4,000 out of 8,000 design hours. Also assume that waste is cut by 50 percent and that Solvent Y is responsible for 19,000 of 20,000 pounds of toxic waste. What is the new environmental cost for Solvent Y?LO1

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1. Environmental activity costs Activity Design products (to reduce pollution) Test for contamination Treat toxic waste Operate pollution control equipment Costs $ 180,000 320,000 1,000,000 800,000 2. Driver data Solvent X Solvent Y Design hours 4,000 2,000 Testing hours 7,000 9,000 Pounds of waste 800 19,200 Machine hours 4,000 76,000 3. Other production data Nonenvironmental production costs Units produced Solvent X Solvent Y $3,360,000 $6,520,000 400,000 400,000