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	$2,500,000	300	200
Machining	Machine hours	71,000,000	100,000	300,000
Engineering	Engineering hours	5,600,000	50,000	100,000
Packing	Packing orders	200,000	100,000	400,000

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

Setups	$ per setup
Machining	$ per machine hour
Engineering	$ per engineering hour
Packing	$ per packing order

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

Deluxe	$per unit
Regular	$per unit