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Activity Rates and Product Costs using Activity-Based Costing Garfield Inc, manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures.
Activity Rates and Product Costs using Activity-Based Costing Garfield 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: Activity Casting Assembly Budgeted Activity Cost Activity Base $209,990 Machine hours 187,380 Direct labor hours 26,550 Number of inspections 35,760 Number of setups 35,200 Number of loads 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 Entry Dining Total Machine hours 4,840 4,290 9,130 Direct labor hours 4,160 6,250 10,410 Number of inspections 1,350 420 1,770 Number of setups 190 50 240 Number of loads 700 180 880 Units produced 9,600 4,800 14,400 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 Activity Rate Casting per machine hour Assembly per direct labor hour Inspecting per inspection Setup per setup Materials handling 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 rates to the nearest cent. Product Total Activity Cost Activity Cost Per Unit Entry Lighting Fixtures Dining Room Lighting Fixtures
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