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:

Line Item Description Deluxe Regular

Quantity $100,000800,000$

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 Deluxe Regular Activity Cost

Setups Number of setups $300200$ $$2,100,000$

Machining Machine hours $100,000300,00064,000,000$

Engineering Engineering hours $50,000100,00015,000,000$

Packing Packing orders $100,000400,000250,000$

Required:

$1.$ Calculate the overhead rates for each activity. If required, carry your answers out to the nearest cent.

Line Item Description Overhead rate

Setups $fill in the blank $1$

$3,900$

per setup

Machining $fill in the blank $2$

$130$

per machine hour

Engineering $fill in the blank $3$

$60$

per engineering hour

Packing $fill in the blank $4$

$0\mathrm{.}4$

per packing order

$2.$ Calculate the per$-$unit product cost for each product. Round your answers to the nearest whole dollar.

Line Item Description Per$-$unit product cost

Deluxe $fill in the blank $5$

$1,170,000$

per unit

Regular $fill in the blank $6$

$780,000$

per unitActivity Rates and Activity$-$Based Product Costing

In addition, the following information was provided so that overhead costs could be assigned to each product:

Required:

Calculate the overhead rates for each activity. If required, carry your answers out to the nearest cent.

Calculate the per$-$unit product cost for each product. Round your answers to the nearest whole dollar.

Deluxe $$

X per unit

Regular $

X per unit

T Check My Work

Determine the overhead rates by dividing the activity cost by the total number of drivers.

Assign costs using the rates in #$1$ and the drivers per product. Total costs for each product and divide by the number of units.