ebook El Printem Product Costs using Activity Rates Mercules Inc. manufactures elliptical exercise machines and treadmills. The products are produced in its Fabrication and Assembly production departments. In addition to production activities, several other activities are required to produce the two products. These activities and their associated activity rates are as follows: Activity Activity Rate Fabrication $28 per machine hour Assembly $13 per direct labor hour Setup $55 per setup Inspecting $29 per inspection Production scheduling $14 per production order Purchasing 511 per purchase order