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Caldwell Home Appliances Inc. is estimating the activity cost associated with producing ovens and refrigerators. The indirect labor can be traced into four separate activity

Caldwell Home Appliances Inc. is estimating the activity cost associated with producing ovens and refrigerators. The indirect labor can be traced into four separate activity pools, based on time records provided by the employees. The budgeted activity cost and activity-base information are provided as follows:

1

Activity

Activity Pool Cost

Activity Base

2

Procurement

$51,030.00

Number of purchase orders

3

Scheduling

4,944.00

Number of production orders

4

Materials handling

15,207.00

Number of moves

5

Product development

9,130.00

Number of engineering changes

6

Total cost

$80,311.00

The estimated activity-base usage and unit information for two product lines was determined as follows:

Number of
Purchase Orders Production Orders Moves Engineering Change Orders Units
Ovens 407 132 211 68 826
Refrigerators 223 74 200 42 584
Totals 630 206 411 110 1,410
Required:
Complete the Activity Tables for ovens and refrigerators.
a. Determine the activity rate for each activity cost pool. Enter these rates in the Activity Rate columns.
b. Use the activity rates in (a) to determine the activity-based cost per unit of each product. Round the per-unit rates to the nearest cent.

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