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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 140,000 420,000 Prime costs $11,480,000 $48,720,000 $60,200,000 Machine hours 140,000 700,000 840,000 400 3,600 4,000 Engineering hours Receiving orders 400 1,200 1,600 Inspection hours 900 1,800 2,700 Overhead costs: Machining $10,080,000 Engineering 1,880,000 Receiving 432,000 Inspecting products 297,000 Required: 1. Calculate the four activity rates. Machining rate 12 per machine hour Engineering rate $ 470 per hour Receiving rate $ 270 per order Inspecting rate $ 110 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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