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 Budgeted Activity Cost $356,400 298,900 Inspection Shipping Customer Service Total 73,000 123,200 69,000 $920,500 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: Machine Number of Number of Number of Customer Customer Service Hours Setups Inspections Orders Requests Units White sugar 2,900 180 200 880 60 7,250 Brown sugar 1,850 270 300 2,420 380 4,625 Powdered sugar 1,850 250 500 1,100 160 4,625 Total 6,600 700 1,000 4,400 600 16,500 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 Inspection Shipping Customer service per setup per inspection hour 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