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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

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 Deluxe Regular Activity Cost
Setups Number of setups 300 200 $1,850,000
Machining Machine hours 100,000 300,000 40,000,000
Engineering Engineering hours 50,000 100,000 13,500,000
Packing Packing orders 100,000 400,000 450,000

Required:

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

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