Activity Based Product Costing Sweet Sugar Company manufactures three products (white sogar, brown sug and powdered suger) in a continuous production process Senior management has asked the controller to conduct an activity based costing study. The controller identified the amount of factory overhead required by the critical activities of the organization as follows: Activity Budgeted Activity Cost Production $369,600 Setup 169,600 Inspection 67,500 Shipping 163,800 Customer service 62,500 Total 5833,000 Setup The activity basis dentified for each activity are as follows Activity Activity lase Production Machine hours Number of steps Inspection Number of inspections Shipping Number of customer orders Customer service Number of customer service requests The activity be usage quantities and units produced for the three products were determined from corporate records and are as follow Customer Number of Number of Number of Service Setups Customer Orders Machine H Tasnertins Reasta tinis Customer service Number of customer service requests The activity-base usage quantities and units produced for the three products were determined from corporate records and are as follows: Customer Number of Number of Number of Service Setups Customer Orders Machine Hours Inspections Requests Units 2,900 100 180 840 50 7,250 Brown sugar 1,850 150 270 2,310 320 4,625 Powdered sugar 1,850 150 450 1,050 130 4,625 Total 6,600 400 900 4,200 500 16,500 Each product requires 0.9 machine hour per unit White sugar Required: If required, round all per unit amounts to the nearest cent. 1. Determine the activity rate for each activity Production per machine hour Setup per setup per move Inspection Shipping per custard Customer service per customer service request 2. Determine the total and per-unit activity cost for all three products Total Activity Cost Activity Cost Per Unit White sugar Brown sugar Powdered sugar 2,310 1,850 1,850 6,600 150 150 400 270 450 900 1,050 320 4,625 130 4.625 500 16,500 Total 4,200 Each product requires 0.9 machine hour per unit. Required: If required, round all per unit amounts to the nearest cent. 1. Determine the activity rate for each activity, Production per machine houd Setup per setup Inspection per move Shipping per cust. ord. Customer service ter customer service request 2. Determine the total and per unit activity cost for all three products, Total Activity Cost Activity Cost Per Unit White sugar Brown sugar Powdered sugar 3. Why aren't the activity unit costs equal across all three products since they require the same machine time per unit? The unit costs are different because the products consume many activities in ratios different from the