Question
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 $2,100,000 Machining Machine hours 100,000 300,000 56,000,000 Engineering Engineering hours 50,000 100,000 7,500,000 Packing Packing orders 100,000 400,000 300,000
Required:
1. Calculate the overhead rates for each activity. If required, carry your answers out to the nearest cent.
Setups $fill in the blank 1 per setup Machining $fill in the blank 2 per machine hour Engineering $fill in the blank 3 per engineering hour Packing $fill in the blank 4 per packing order
2. Calculate the per-unit product cost for each product. Round your answers to the nearest whole dollar.
Deluxe $fill in the blank 5per unit Regular $fill in the blank 6per unit
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 | $2,100,000 |
| Machining | Machine hours | 100,000 | 300,000 | 56,000,000 |
| Engineering | Engineering hours | 50,000 | 100,000 | 7,500,000 |
| Packing | Packing orders | 100,000 | 400,000 | 300,000 |
Required:
1. Calculate the overhead rates for each activity. If required, carry your answers out to the nearest cent.
| Setups | $fill in the blank 1 per setup |
| Machining | $fill in the blank 2 per machine hour |
| Engineering | $fill in the blank 3 per engineering hour |
| Packing | $fill in the blank 4 per packing order |
2. Calculate the per-unit product cost for each product. Round your answers to the nearest whole dollar.
| Deluxe | $fill in the blank 5per unit |
| Regular | $fill in the blank 6per unit |
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