Activity-Based Product Costing Sweet Sugar Company manufactures three products (white sugar, brown sugar, and powdered sugar) in a continuous production process. Senior management has asked the controller to conduct an activity-based costing study. The controller identified the amount of factory overhead required by the critical activities of the organization as follows: Activity Budgeted Activity Cost Production $392,000 Setup 158,000 Inspection 75,000 Shipping 189,000 Customer service 57,500 Total $871,500 The activity bases identified for each activity are as follows: Activity Activity Base Production Machine hours Setup Number of setups Inspection Number of inspections Shipping Number of customer orders Customer service Number of customer service requests The activity-base usage quantities and units produced for the three products were determined from corporate records and are as follows: Customer Number of Number of Number of Service Setups Customer Orders Machine Hours Inspections Requests Units 3,080 100 200 900 50 7,700 Brown sugar 1,960 150 300 2,480 320 4,900 Powdered sugar 1,960 150 500 1,120 130 4,900 Total 7,000 400 1,000 4,500 500 17,500 White sugar Each product requires 0.9 machine hour per unit. Required: If required, round all per unit amounts to the nearest cent. 1. Determine the activity rate for each activity. Production $ per machine hour Setup $ per setup Inspection $ per move Shipping per cust. ord. Customer service $ per customer service request 2. Determine the total and per-unit activity cost for all three products. Total Activity Cost Activity Cost Per Unit White sugar $ Brown sugar Powdered sugar 3. Why aren't the activity unit costs equal across all three products since they require the same machine time per unit? The unit costs are different because the products consume many activities in ratios different from the suga Powdered sugar volume 3. Why aren't the activity unit costs equal across all three products since they require the same machine sales mix ? The unit costs are different because the products consume many activities in ratios different from the