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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.
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 Cost Activity Base Activity Casting $225,600 Machine hours Assembly 171,520 Direct labor hours Inspecting 35,880 Number of inspections Setup 38,070 Number of setups Materials handling 38,270 Number of loads Corporate records were obtained to estimate the amount of activity to be used by the trio products. The estimated activity-base usage quantities and units produced follows Activity Base Entry Dining Total Machine hours 4,980 4,420 9,400 Direct labor hours 4.290 6,430 10.720 Number of inspections 2.100 660 2,760 Number of setups 220 50 270 Number of loads 700 190 890 Units produced 10.000 5.000 15.000 a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar. Activity Activity Rate Casting 5 per machine hour Assembly S per direct labor hour Inspecting S per inspection Setup 5 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
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