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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 foxtures.
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 foxtures. These activities and their associated budgeted activity costs and activity bases are as follows: Budgeted Activity Activity Cost Activity Base Casting $242,000 Machine hours Assembly 187,680 Direct labor hours Inspecting 38,080 Number of inspections Setup 46,400 Number of setups Materials handling 42,750 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 5.130 4,550 Direct labor hours 4.420 6,620 11,040 Number of inspections 2,070 650 2,720 Number of setups 250 60 320 Number of loads 750 200 950 Units produced 10,200 5,100 15,300 9,680 a. Determine the activity rate for each activity. If required round the rain in the neare dalle 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 Inspecting per direct labor hour 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 Lighting Fixtures Dining Room Lighting Fixtures
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