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Activity Rates and Product Costs using Activity-Based Costing Contemporary Lighting Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the
Activity Rates and Product Costs using Activity-Based Costing Contemporary Lighting Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budgeted activity costs and activity bases are as follows: Budgeted Activity Casting Assembly Inspecting Setup Materials handling 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 Machine hours Direct labor hours Number of inspections Number of setups Number of loads Units produced Activity Cost Activity Base $218,730 Machine hours 162,600 Direct labor hours 25,200Number of inspections 55,100Number of setups 43,600 Number of loads Entry Dining Total 9,510 4,340 6,50010,840 2,100 380 1,090 10,000 5,000 15,000 5,040 4,470 1,600 310 860 500 70 230
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