Exercise 4-3 (Static) Compute ABC Product Costs [LO4-3] Larner Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains the following six activity cost pools and activity rates: Activity Cost Pool Labor-related Machine-related Machine setups Production orders Shipments General factory Activity Rates $ 7.00 per direct labor-hour $ 3.00 per machine-hour $ 40.00 per setup $ 160.00 per order $ 120.00 per shipment $ 4.00 per direct labor-hour Cost and activity data have been supplied for the following products: Direct materials cost per unit Direct labor cost per unit Number of units produced per year J78 $ 6.50 $ 3.75 4,000 B52 $31.00 $ 6.00 100 Direct labor-hours Machine-hours Machine setups Production orders Shipments Total Expected Activity J78 B52 1,000 40 200 30 5 1 5 1 10 1 Required: Compute the unit product cost of each product listed above. (Do not round intermediate calculations. Round your answers to 2 decimal places.) J78 B52 $ 15.95 $ 47.90 Unit product cost Med Max buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to dozens of hospitals. In the face of declining profits, Med Max decided to implement an activity-based costing system to improve its understanding of the costs incurred to serve each hospital. The company broke its selling and administrative expenses into four activities as shown below: ed Activity Cost Pool Customer deliveries Manual order processing Electronic order processing Line item picking Total selling and administrative expenses Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked Total Cost $ 400,000 300,000 200,000 500,000 $ 1,400,000 Total Activity 5,000 deliveries 4,000 orders 12,500 orders 400,000 line items Med Max gathered the data below for two of the many hospitals that it serves-City General and County General: Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked Activity City County General General 10 20 0 40 10 0 100 260 Required: 1. Compute the activity rate for each activity cost pool. 2. Compute the total activity costs that would be assigned to City General and County General. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the total activity costs that would be assigned to City General and County General. (Do not round intermediate calculations.) Activity Cost Pool City County General General ABC Cost ABC Cost $ 800$ 1,600 xs 3,000 Customer deliveries Manual order processing Electronic order processing Line item picking Total activity costs OOO $ 160 x $ 125$ 1,085 $ 325 4,925
