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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 Enformation 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 Enformation on these activities and their drivers is given below. Regular Deluxe Total Units produced 130,000 390,000 Prime costs $11,180,000 $46,800,000 $57,980,000 Machine hours 130,000 650,000 780,000 Engineering hours 400 3,600 4,000 Receiving orders 300 900 1,200 Inspection hours 800 1,600 2,400 Overhead costs: Machining Engineering Receiving Inspecting products $8,580,000 1,880,000 300,000 336,000 Required: 1. Calculate the four activity rates. 11 per machine hour Machining rate Engineering rate Receiving rate 470 per hour 250 per order Inspecting rate 140 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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