Activity-Based Environmental Cost Assignments

Pinter Company had the following environmental activities and product information:

1. Environmental activity costs

Activity	Costs
Design products (to reduce pollution)	$ 129,600
Test for contamination	230,400
Treat toxic waste	720,000
Operate pollution control equipment	576,000

2. Driver data

	Solvent X	Solvent Y
Design hours	2,900	2,500
Testing hours	5,100	9,300
Pounds of waste	600	17,400
Machine hours	2,900	69,100

3. Other production data

	Solvent X	Solvent Y
Nonenvironmental production costs	$1,692,000	$4,068,000
Units produced	360,000	360,000

Required:

1. Calculate the activity rates that will be used to assign environmental costs to products.

Design products	$	per design hour
Testing	$	per test hour
Treating waste	$	per pound of waste
Operating equipment	$	per machine hour

2. Determine the unit environmental and unit costs of each product using ABC. If required, round your answers to the nearest cent.

Activities	Solvent X	Solvent Y
Unit environmental cost	$	$
Unit cost	$	$

3. What if the design costs increased to $219,600 and the cost of toxic waste decreased to $360,000? Assume that Solvent Y uses 5,000 out of 10,000 design hours. Also assume that waste is cut by 50 percent and that Solvent Y is responsible for 6,840 of 7,200 pounds of toxic waste. What is the new environmental cost for Solvent Y? If required, round your intermediate calculations and answer to the nearest cent. $ per unit