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 $421,200 Setup 248,400 Inspection 65,700 Shipping 140,600 Customer service 58,500 $934,400 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 os follows: Total Number of Number of Number of Customer Service The activity-base usage quantities and units produced for the three products were determined from corporate records and are as follows: Number of Customer Number of Number of Machine Hours Setups Customer Orders Service Inspections Requests Units White sugar 3,430 150 180 740 50 8,575 Brown sugar 2,180 230 270 2,040 320 5,450 Powdered sugar 2,190 220 450 920 130 5,475 Total 7,800 600 900 3,700 500 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 Shipping per move per cust. ord. Customer service per custom ervice request 2. Determine the total and per-unit activity cost for all three products. Total Activity Cost Activity Cost Per Unit White sugar Previous Na 450 320 5,450 130 5,475 500 19,500 Brown sugar 2,180 230 270 2,040 Powdered sugar 2,190 220 920 Total 7,800 600 900 3,700 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 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 per move White sugar Brown sugar Powdered sugar volume 3. Why aren't the activity unit costs equal across all three products since they require the same machid sales mix nie? The unit costs are different because the products consume many activities in ratios different from the sales mix