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 90,000 270,000 Prime costs $6,840,000 $27,000,000 $33,840,000 Machine hours 90,000 450,000 540,000 Engineering hours 200 1,800 2,000 Receiving orders 500 1,500 2,000 Inspection hours 1,000 2,000 3,000

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 90,000 270,000 Prime costs $6,840,000 $27,000,000 $33,840,000 Machine hours 90,000 450,000 540,000 Engineering hours 200 1,800 2,000 Receiving orders 500 1,500 2,000 3,000 Inspection hours 1,000 2,000 Overhead costs: Machining $5,400,000 Engineering 900,000 Receiving 760,000 Inspecting products 390,000 Required: 1. Calculate the four activity rates. Machining rate 110 X per machine hour Engineering rate $ 600 X per hour Receiving rate $ 200 x per order Inspecting rate $ 190 X per hour 2. Calculate the unit costs using activity rates. Round your answers to the nearest cent. Unit cost Basic $ 187.68 X per unit Advanced 305.71 X per unit Calculate the overhead cost per unit. Round your answers to the nearest cent. Overhead Cost Basic 115.68 X per unit Advanced 193.71 X 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 $ 171,000 Advanced $ 342,000 X