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Activity rates and product costs using activity-based cost

Idris Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budgeted activity costs and activity bases are as follows:

Activity	Budgeted Activity Cost	Activity Base
Casting	$299,200	Machine hours
Assembly	191,880	Direct labor hours
Inspecting	26,850	Number of inspections
Setup	36,960	Number of setups
Materials handling	40,480	Number of loads

Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced follow:

Activity Base	Entry	Dining	Total
Machine hours	4,960	4,390	9,350
Direct labor hours	4,260	6,400	10,660
Number of inspections	1,360	430	1,790
Number of setups	230	50	280
Number of loads	700	180	880
Units produced	9,800	4,900	14,700

a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar.

Activity	Activity Rate
Casting
Assembly
Inspecting
Setup
Materials handling

b. Use the activity rates in (a) to determine the total and per-unit activity costs associated with each product. Round the per unit amounts to the nearest cent.

Product	Total Activity Cost	Activity Cost Per Unit
Entry Lighting Fixtures
Dining Room Lighting Fixtures