Instructions Mello Manufacturing Company is a diversified manufacturer that manufactures three products (Alpha, Beta, and Omega) in a continuous production process, Senior management has asked the controllor to conduct an activity based costing study. The controller identified the amount of factory overhead required by the critical activities of the organization as follows Activity 7 Production 1 Setup . Material handling Inspection Product engineering Total Activity Cost Pool $259,200.00 55,000.00 9,750.00 60,000.00 123,200.00 $507,150.00 1 The activity bases identified for each activity are as follows: Activity Activity Base Production Machine hours Setur Number of setups Material handling Number of parts Inspection Number of inspection hours Product engineering Number of engineering hours The activity-base usage quantities and units produced for the three products were determined from corporate records and are as follows: Machine Number of Number of Number of Number of Hours Setups Parts Alpha 1,440 75 65 Inspection Hours Engineering Hours Units 400 125 1,800 300 175 1,350 Beta 1,080 165 720 310 180 500 140 900 Omega Total 3,240 550 325 1,200 440 4,050 Each product requires 40 minutes per unit of machine time, Required Complete the Activity Tables for Alpha Bots and more 1. Determine the city rate for each activity 2. Use me activity rates in (1) to determine the food and pachwycosts will alive products 3. Why are the activity ont consequal across alle products are they require the same machine time por unt? "Wrequired, round al per amounts to the nearest con Activity Table Alpha Complete the Activity Table for Alpha 1. Determine the accate for each ciwy Enter these rates the Alwy Raleco 2. Use the activity rates in () to demine me total and per-unit addwly costs associated with required, round of per unit amounts to the nearest cont Alpha Activity Activity Activity Activity Com Rate Production $ $ 5 $ Material handing Inspection Product Engineering Total activity cost Number of units Activity cost per unit $ $ $ Activity Table Beta Complete Activity Table for a 1. Dotermine the accate for each actity Enter these rates in the Activity Rae columns 2. Use the activity roles in (1) to determine the total and perunt activity costs associated with Bota Wrequired, round a pornit amounts to the newest cont Beta Activity Activity Activity Rate Activity Cost Usage Production $ Setup $ Meral $ $ s handling Inspection Product Engineering Total activity cost Number of units Activity cost per unit $ $ Activity Table - Omega Complete the Activity Table for Omega 1. Determine the activity rate for each activity. Enter these rates in the Activity Rate columns 2. Use the activity rates in (1) to determine the total and per unnt activity costs associated with Omega." "required, round all por-unit amounts to the nearest con Omega Activity Activity Activity Rate Activity Cost Usage x S $ Production Setup S $ $ handling Inspection Product Engineering $ $ Total activity cost Number of units Activity cost per unit $ Final Question 3. Why aren't the activity unit costs equal across all three products since they require the same machine time per unit? The difference is because the products consume many activities in ratios different from the volume 2) The difference is due to product cost distortions 3 The difference is due to machine inefficiencies
