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 DescriptionDeluxeRegularQuantity100,000800,000Selling price$900$750Unit prime cost$529$483

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

Activity NameActivity DriverDeluxeRegularActivity CostSetupsNumber of setups300200$1,950,000MachiningMachine hours100,000300,00052,000,000EngineeringEngineering hours50,000100,0007,500,000PackingPacking orders100,000400,000150,000

Required:

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

Line Item DescriptionOverhead rateSetups$fill in the blank 1 per setupMachining$fill in the blank 2 per machine hourEngineering$fill in the blank 3 per engineering hourPacking$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.

Line Item DescriptionPer-unit product costDeluxe$fill in the blank 5per unitRegular$fill in the blank 6per unit