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Activity rates and product costs using activity-based cost Idris Inc. manufactures entry and dining room lighting fixtures. Rive activities are used in manufacturing the
Activity rates and product costs using activity-based cost Idris Inc. manufactures entry and dining room lighting fixtures. Rive activities are used in manufacturing the fixtures. These activities and their associated budgeted activity costs and activity bases are as follows: Budgeted Activity Cost Activity Base Activity Casting Assembly Inspecting Setup Materials handling $309,900 Machine hours 223,820 Direct labor hours 33,280 Number of inspections 48,640 Number of setups 47,840 Number of loads Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced follow: Activity Base Entry Dining Total Machine hours 5,470 4,860 10,330 Direct labor hours 4,710 7,070 11,780 Number of inspections 1,580 500 2,080 Number of setups 310 70 380 Number of loads Units produced 820 10,800 220 1,040 5,400 16,200 a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar. a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar. Activity Casting Assembly Inspecting Setup Materials handling Activity Rate per machine hour per direct labor hour per inspection per setup per load b. Use the activity rates in (a) to determine the total and per-unit activity costs associated with each product. Round the per unit amounts to the nearest cent. Product Entry Lighting Fixtures Dining Room Lighting Fixtures Total Activity Cost Activity Cost Per Unit
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