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:

ActivityBudgeted

Activity Cost

Activity Base

Casting$268,110 Machine hours

Assembly215,080 Direct labor hours

Inspecting40,000 Number of inspections

Setup42,050 Number of setups

Materials handling36,960 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 BaseEntryDiningTotal

Machine hours5,260 4,670 9,930

Direct labor hours4,530 6,790 11,320

Number of inspections1,900 600 2,500

Number of setups230 60 290

Number of loads700 180 880

Units produced10,400 5,200 15,600

a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar.

ActivityActivity Rate

Casting$fill in the blank 1

per machine hour

Assembly$fill in the blank 2

per direct labor hour

Inspecting$fill in the blank 3

per inspection

Setup$fill in the blank 4

per setup

Materials handling$fill in the blank 5

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.

ProductTotal Activity CostActivity Cost Per Unit

Entry Lighting Fixtures$fill in the blank 6

$fill in the blank 7

Dining Room Lighting Fixtures$fill in the blank 8

$fill in the blank 9

Activity Rates and Product Costs using Activity-Based Costing Lonsdale Inc. manufactures entry and dining room lighting fixtures. Hve 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 $268,110 Machine hours Assembly 215,080 Direct labor hours Inspecting 40,000 Number of inspections 42,050 Number of setups Materials handling 36,960 Number of loads Corporate records were obtained to estimate the amount of activity to be used by the two produets. The estimated activity-base utape quantities and units produced follow: Setup Activity Base Entry Dining Total Machine hours 5,260 4,670 9,930 Direct labor hours 4,530 6,790 11,320 Number of inspections 1,900 600 2,500 Number of setups 230 60 290 Number of loads 700 180 880 Units produced 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 10,400 Assembly per direct labor hour a. Determine the activity rate for each activity. If required, round the rate to the nearest dallar. Activity Rate Activity Casting per machine hour Assembly per direct labor hour Inspecting per inspection Setup per setup Materials handling per load b. Use the activity rates info) 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