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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

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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 5483,600 Setup 228,000 Inspection Shipping Customer service 121,500 154,000 33,900 $1,021,000 Total 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 bata 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 Machine Hours Inspections Customer Orders Requests Units White sugar 3,430 150 300 880 30 8,525 Customer Number of Number of Number of Service Setups Customer Orders Machine Hours Inspections Requests Units White sugar 3,430 150 300 880 30 8,575 Brown sugar 2,180 230 450 2,420 190 5,450 Powdered sugar 2,190 220 750 1,100 80 5,475 Total 7,800 600 1,500 4,400 300 19,500 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 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

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