1. 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		150,000		450,000
   Prime costs		$13,200,000		$45,000,000		$58,200,000
   Machine hours		150,000		750,000		900,000
   Engineering hours		500		4,500		5,000
   Receiving orders		200		600		800
   Inspection hours		800		1,600		2,400
   Overhead costs:
   Machining		$12,600,000
   Engineering		3,000,000
   Receiving		280,000
   Inspecting products		384,000

   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

   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	$fill in the blank 9
   Deluxe	$fill in the blank 10