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 $489,100 112,200 Inspection 128,800 Shipping 148,200 Customer service 47 200 Total $925,500 The aty 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: white sugar Customer Number of Number of Number of Service Setups Customer Orders Machine Hours Inspections Requests Units 2,950 BO 280 780 40 7,375 Brown sugar ) 1,880 110 420 2,150 250 4,700 Powdered sugar 1,870 110 700 970 110 4,675 Total 6.700 300 1,400 3,900 400 16,750 Each produd requires 0.9 machine hour per unit. Required: All work saved 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 S 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 volume Feedback Check My Work 1. Calculate Activity Rate for each activity: Total Cost = Total Activity-Base - Activity Rate 2. Calculate Activity cost for each product: Activity-Base Usage x Activity rate from Ren (11