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Activity-Based Costing HealthTec Equipment Company manufactures stationary bicycles and treadmills. The products are produced in the Fabrication and Assembly production departments. In addition to production

Activity-Based Costing

HealthTec Equipment Company manufactures stationary bicycles and treadmills. The products are produced in the Fabrication and Assembly production departments. In addition to production activities, several other activities are required to produce the two products. These activities and their associated activity rates are as follows:

Activity Activity Rate
Fabrication $28 per machine hour (mh)
Assembly $15 per direct labor hour (dlh)
Setup $50 per setup
Inspecting $25 per inspection
Production scheduling $18 per production order
Purchasing $8 per purchase order

The activity-base usage quantities and units produced for each product were as follows:

Stationary Bicycle Treadmill
Machine hours 1,870 880
Direct labor hours 400 210
Setups 60 20
Inspections 700 410
Production orders 60 20
Purchase orders 220 140
Units produced 1,000 1,000

Use the activity rate and usage information to compute the total activity costs and the activity costs per unit for each product. If required, round your answers to two decimal places.

Activity Stationary Bicycle Activity Cost Treadmill Activity Cost
Fabrication $ $
Assembly
Setup
Inspecting
Production scheduling
Purchasing
Total $ $
Number of units
Activity cost per unit $ $

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