Question
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 130,000 390,000 Prime costs $9,880,000 $42,120,000 $52,000,000 Machine hours 130,000 650,000 780,000 Engineering hours 500 4,500 5,000 Receiving orders 500 1,500 2,000 Inspection hours 1,000 2,000 3,000 Overhead costs: Machining $8,580,000 Engineering 3,000,000 Receiving 440,000 Inspecting products 360,000 Required: 1. Calculate the four activity rates. Machining rate $ per machine hour Engineering rate $ per hour Receiving rate $ per order Inspecting rate $ 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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