Activity Cost Pools, Activity Rates, and Product Costs using Activity-Based Costing

Kitchen Wares Inc. is estimating the activity cost associated with producing ovens and refrigerators. The indirect labor can be traced into four separate activity pools, based on time records provided by the employees. The budgeted activity cost and activity-base information are provided as follows:

Activity	Activity Pool Cost			Activity Base
Procurement		$139,700		Number of purchase orders
Scheduling		7,600		Number of production orders
Materials handling		29,230		Number of moves
Product development		30,360		Number of engineering changes
Total cost		$206,890

The estimated activity-base usage and unit information for Kitchen Wares' two product lines was determined from corporate records as follows:

		Number of Purchase Orders			Number of Production Orders			Number of Moves			Number of Engineering Changes			Units
Ovens			640			250			470			160			1,520
Refrigerators			630			130			320			60			1,140
	Totals		1,270			380			790			220			2,660

a. Determine the activity rate for each activity cost pool. If required, round your answers to the nearest dollar.

Procurement (per purchase order)	$
Scheduling (per production order)	$
Materials handling (per move)	$
Product development (per engineering change)	$

b. Determine the activity-based cost per unit of each product. Round your answers to the nearest cent.

Ovens	$ per unit
Refrigerators	$ per unit