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Activity-Based Product Costing Roberts Company produces two weed eaters: basic and advanced. The company has four activities: machining, engineering, receiving, and inspection. Information on these
Activity-Based Product Costing Roberts Company produces two weed eaters: basic and advanced. The company has four activities: machining, engineering, receiving, and inspection. Information on these activities and their drivers is given below. Basic Advanced Total Units produced 150,000 Prime costs 450,000 $46,800,000 750,000 $10,800,000 150,000 $57,600,000 Machine hours 900,000 2,000 200 1,800 Engineering hours Receiving orders 300 1,200 Inspection hours 800 1,600 2.400 Overhead costs: $9,000,000 860,000 Machining Engineering Receiving Inspecting products 468,000 480,000 Required: 1. Calculate the four activity rates. Machining rate 10 per machine hour Engineering rate $ 430 per hour Receiving rate $ 390 per order Inspecting rate 200 per hour 2. Calculate the unit costs using activity rates. Round your answers to the nearest cent. Unit cost Basic per unit Advanced per unit Calculate the overhead cost per unit. Round your answers to the nearest cent. Overhead Cost Basic per unit Advanced 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 Basic Advanced
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