Activity Rates and Product costs using Activity-Based Costing Lonsdale 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 Activity Cost Activity Base Casting $251.250 Machine hours Assembly 194,820 Direct labor hours Inspecting 29,400 Number of inspections Setup 40,300 Number of setups Materials handling 40,560 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 5,330 4,720 10.050 Direct labor hours 4.580 6,880 11,460 Number of inspections 1.600 500 2,100 Number of setups 250 60 310 Number of loads 820 220 1,040 Unit produced 10.600 5,300 15,900 a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar Previous Net Machine hours 5,330 4,720 10,050 Direct labor hours 4,580 6,880 11,460 Number of inspections 1,600 500 2,100 Number of setups 250 60 310 Number of loads 820 220 1,040 Units produced 10.600 5,300 15.900 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 amounts to the nearest cent. Product Total Activity Cost Activity Cost Per Unit Entry Ughting Fixtures Dining Room Lighting Fixtures Previous Next