ACTIVITY RATES AND ACTIVITY-BASED PRODUCT COSTING Hammer Company produces a variety of electronic equipment. One of its plants produces two laser printers: the deluxe and the regular. At the beginning of the year, the following data were prepared for this plant:

Deluxe Regular Quantity 100,000 800,000 Selling price $900 $750 Unit prime cost $529 $483 In addition, the following information was provided so that overhead costs could be assigned to each product:

Activity Name Activity Driver Activity Cost ($) Deluxe Regular Setups Number of setups 2,000,000 300 200 Machining Machine hours 80,000,000 100,000 300,000 Engineering Engineering hours 6,000,000 50,000 100,000 Packing Packing orders 1,000,000 100,000 400,000 Required:

. Calculate the overhead rates for each activity.

. Calculate the per-unit product cost for each product.

Exercise