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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: Budgeted Activity Cost Activity Base Activity Casting $247,250 Machine hours Assembly 191,590 Direct labor hours Inspecting 23,940 Number of inspections 50,400 Number of setups Setup Materials handling 39,950 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 Machine hours Entry 5,240 4,510 1,300 Direct labor hours Dining 4,650 6,760 410 70 180 5,200 Total 9,890 11,270 1,710 350 Number of inspections Number of setups 280 Number of loads 850 670 10,400 Units produced 15,600 Number of inspections 1,300 410 70 1,710 350 Number of setups 280 670 Number of loads 180 850 Units produced 10,400 5,200 15,600 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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