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Activity-Based Product Costing Davis Company produces two hair dryers: regular and deluxe. The company has four activities: machining, engineering, receiving, and inspection. Information on these
Activity-Based Product Costing Davis Company produces two hair dryers: regular and deluxe. The company has four activities: machining, engineering, receiving, and inspection. Information on these activities and their drivers is given below. Regular Deluxe Total Units produced 100,000 300,000 Prime costs $8,200,000 $32,400,000 $40,600,000 Machine hours 100,000 500,000 600,000 500 4,500 5,000 Engineering hours Receiving orders 500 1,500 2,000 Inspection hours 900 1,800 2,700 Overhead costs: Machining $9,000,000 3,000,000 Engineering Receiving 800,000 Inspecting products 324,000 Required: 1. Calculate the four activity rates. per machine hour Machining rate Engineering rate Receiving rate per hour per order Inspecting rate per hour 2. Calculate the unit costs using activity rates. Round your answers to the nearest cent. Unit cost Regular per unit Deluxe per unit Calculate the overhead cost per unit. Round your answers to the nearest cent. Overhead Cost Regular per unit Deluxe per unit 3. If consumption ratios instead of activity rates were used to assign costs instead of activity rates, show the cost assignment for the inspection activity Cost assignment Regular Deluxe
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