7 8 9 Activities Activity Cost Poo 10 Production $313,500 Activity Base Machine Hours (MH) 11 Setup $79,800 Number of Setups 12 Materials handling $14,800 Number of Parts 13 Inspection $80,500 Number of Insp. Hours (H) 14 Product engineerin $142,600 Number of Eng. Hours (EH) IS $631,200 16 17 The activity-base usage quantities and units produced for the three products were determined from corporate records and are as follows: 18 19 Number of MH Number of Setups Number of Parts Number of IH Number of EH Number of Units 20 Produced 21 Sine 1,500 80 75 350 130 2,000 22 Cos 1,125 170 95 250 180 23 Tan 675 320 200 400 150 1,500 900 24 Total 3,300 570 370 1,000 460 25 26 Each product requires 45 minutes per unit of machine time. 27 28 Required: 29 1. Determine the activity rate for each activity. Round all per unit amounts to the nearest cent. Formula: Activity rate = Activity cost pool+ Number of activity bas 30 31 32 Activities 33 Production Activity Cost Po Number of Activity Base Activity rate 34 Setup 35 Materials handling 36 Inspection 37 Product engineering 38 39 2. Determine the total and per-unit activity cost for all three products. Round all total costs to whole number and round all per unit amounts to the nearest cent. Formula: Activity-Base Usage x Activity rate from Req. (1)=Activity cost Sum all activity costs per product to determine the total activity costs and Divide the total activity overhead by budgeted units to compute the activity costs per unit for each produ 40 41 42 43 44 45 Products 46 Sine 47 Cos 48 Tan 49 Total 50 51 52 53 54 55 Production Setup Materials handling Inspection Product engineeri Total costs Unit cost 3. Why aren't the activity unit costs equal across all three products since they require the same machine time per unit?