Question
Hercules Inc. manufactures elliptical exercise machines and treadmills. The products are produced in its Fabrication and Assembly production departments. In addition to production activities, several
Hercules 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 $21 per machine hour Assembly $16 per direct labor hour Setup $55 per setup Inspecting $28 per inspection Production scheduling $17 per production order Purchasing $14 per purchase order The activity-base usage quantities and units produced for each product were as follows:
Activity Base Elliptical Machines Treadmill Machine hours 1,694 999 Direct labor hours 483 188 Setups 58 18 Inspections 740 444 Production orders 69 14 Purchase orders 189 115 Units produced 266 178 Use the activity rate and usage information to determine the total activity cost and activity cost per unit for each product. If required, round the per unit answers to the nearest cent.
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