HiTech Products manufactures three types of CD players, Cheap, Econo, and Deluxe. HiTech uses activity-base product costing system. The company has identified five activities and the related cost drivers for each activity.

Activity Budgeted Costs Cost Driver

Material Handling 225,000 # of Parts

Material Insertion 2,475,000 # of Parts

Automate Machinery 840,000 Machine Hours

Finishing 170,000 Labor Hours

Packaging 170,000 Orders Shipped

Total indirect Manufacturing 3,880,000

costs

Following info pertains to each product line of CD players for next year

Cheap Econo Deluxe

Units to be produced 10,000 5,000 2,000

Orders to be shipped 1,000 500 200

# of parts per unit 10 15 25

Machine hours per unit 1 3 5

Labor hours per unit 2 2 2

1. What is HiTechs cost application ate for material handling activity for next year?
   1. 2.25 per part
   2. 1.00 per unit
   3. 6.62 per labor hour
   4. 13.23 per unit

2. What is HiTechs application rate for automated machinery activity for next year?
   1. 24.00 per machine hour
   2. 49.42 per unit
   3. 84.00 per machine hour
   4. 24.50 per labor hour
   5. 50.00 per machine hour

3. What is HiTechs cost application rate for finishing activity for next year?
   1. 10.00 per labor hour
   2. 5.00 per machine hour
   3. 5.00 per unit
   4. 5.00 per labor hour
   5. 7.50 per unit

4. Under an activity-based product costing system, what is the per unit cost of Cheap?
   1. 225.00
   2. 272.00
   3. 164.00
   4. 228.24
   5. 141.00

Can you explain the calculations to each answer?