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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 $7,000,000 $35,400,000 $42,400,000
Machine hours 100,000 500,000 600,000
Engineering hours 200 1,800 2,000
Receiving orders 300 900 1,200
Inspection hours 1,000 2,000 3,000
Overhead costs:
Machining $9,000,000
Engineering 1,200,000
Receiving 480,000
Inspecting products 450,000

Required:

1. Calculate the four activity rates.

Machining rate $fill in the blank 1 per machine hour
Engineering rate $fill in the blank 2 per hour
Receiving rate $fill in the blank 3 per order
Inspecting rate $fill in the blank 4 per hour

2. Calculate the unit costs using activity rates. Round your answers to the nearest cent.

Unit cost
Regular $fill in the blank 5 per unit
Deluxe $fill in the blank 6 per unit

Calculate the overhead cost per unit. Round your answers to the nearest cent.

Overhead Cost
Regular $fill in the blank 7 per unit
Deluxe $fill in the blank 8 per unit

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