1. Lonsdale Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budgeted activity costs andactivity basesare as follows:
4. ActivityBudgeted
5. Activity Cost
6. Activity BaseCasting$570,000Machine hoursAssembly80,000Direct labor hoursInspecting42,000Number of inspectionsSetup38,000Number of setupsMaterials handling23,750Number of loadsCorporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced follow:
8. Activity BaseEntryDiningTotalMachine hours6,00013,00019,000Direct labor hours3,0002,0005,000Number of inspections6004001,000Number of setups300200500Number of loads450500950Units produced6,0003,0009,000a.Determine the activity rate for each activity.
9. ActivityActivity RateCasting$per machine hourAssembly$per direct labor hourInspecting$per inspectionSetup$per setupMaterials handling$per load
10. b.Use the activity rates in (a) to determine the total and per-unit activity costs associated with each product.Round the per unit amounts to the nearest cent.
11. ProductTotal Activity CostActivity Cost Per UnitEntry Lighting Fixtures$$Dining Room Lighting Fixtures$$

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