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 Production Setup Inspection Shipping Customer service Total Budgeted Activity Cost $547,200 218,000 145,600 136,900 89,600 $1,137,300 The activity bases identified for each activity are as follows: Activity Activity Base Production Machine hours Setup Number of setups Inspection. Shipping Number of inspections 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: 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 Setups Number of Customer Orders Service Machine Hours Inspections Requests Units White sugar 3,340 130 320 740 70 8,350 Brown sugar 2,130 190 480 2,040 440 5,325 Powdered sugar 2,130 180 800 920 190 5,325 Total 7,600 500 1,600 3,700 700 19,000 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 Setup per machine hour per setup Inspection Shipping Customer service per move per cust. ord. per customer service request 2. Determine the total and per-unit activity cost for all three products. White sugar Brown sugar Total Activity Cost Activity Cost Per Unit $ 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 volume sales mix