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: Budgeted Activity Activity Cost $431,200 Production Setup 223,800 Inspection 105,000 Shipping 129,000 Customer service 57,500 Total $946,500 The activity bases identified for each activity are as follows: Activity Activity Base Production Machine hours Setup Number of setups Inspection Number of inspections Number of customer Shipping orders Customer Number of customer service requests service 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 Number of mer Orders Service Units Requests Setups Inspections Custo Machine Hours White sugar 3,390 150 280 860 50 8,475 Brown sugar 2,160 230 2,370 320 5,400 420 2,150 220 Powdered sugar 700 1,070 130 5,375 600 Total 7,700 1,400 4,300 500 19,250 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 per machine hour Production Setup per setup Inspection per move Shipping per cust. ord Customer per customer service service request 2. Determine the total and per-unit activity cost for all three products Total Activity Activity Cost Per Cost 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