EX 18-12 Activity Cost Pools, Activity Rates, and Product Costs Using Activity-Based Costing Obj. 4 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: Activity Pool Cost Activity Activity Base Procurement Scheduling Materials handling Product development Total cost $ 12,600 90,000 11,000 50,000 $163,600 Number of purchase orders Number of production orders Number of moves Number of engineering changes The estimated activity-base usage and unit information for two product lines was determined as follows: Number of Engineering Change Orders Number of Purchase Orders 400 300 700 Number of Production Orders 800 400 1,200 Ovens Refrigerators Totals Number of Moves 300 200 500 80 120 Units 1,000 500 1,500 a. Determine the activity rate for each activity cost pool. b. Determine the activity-based cost per unit of each product. Answer Factory Overhead Activity Procurement Scheduling Materials handling Product development Total Activity Base purch. ords. prod. ords. moves ECOS Activity Rate /purch. ord. /prod. ord. /move /ECO Ovens Activity Rate Activity Cost ACM Activity Cost = = Activity Procurement Scheduling Materials handling Product development Total Number of units Activity cost per unit Activity Base Usage x purch. ords. prod. ords. moves ECOs Refrigerators Activity Activity Base Usage X Rate purch. ords. prod. ords. moves ECOs