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 $540,200 Setup 222,000 Inspection 147,200 Shipping 156,000 Customer service 81,000 Total $1,146,400 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 as follows: Customer Number of Number of Number of Service Units Setups Inspections Customer Orders Machine Hours Requests 3,260 130 320 800 60 8,150 Brown sugar 2,070 190 480 2,200 380 5,175 Powdered sugar 2,070 180 800 1,000 160 5,175 Total 7,400 500 1,600 4,000 600 18,500 White sugar 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