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 controller 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 Production Setup Materials handling Inspection Product engineering Total Activity Cost Pool $259,200 55,000 9,750 60,000 123,200 5507,150 The activity bases identified for each activity are as follows: Activity Production Activity Base Machine hours Number of setups Setup Materials handling Inspection Product engineering Number of parts Number of inspection hours Number of engineering hours The activity.hac e untities and units nonducere the three inducts were determined free and as Check My Work Save and Submit Assignment for Grading 96 eBook Calculator The activity-base usage quantities and units produced for the three products were determined from corporate records and are as follows: Number of Setups Number of Parts Number of Inspection Hours Number of Engineering Hours Units Alpha 1,800 Machine Hours 1,440 1,080 720 75 125 175 Beta 30 400 300 500 165 310 550 180 1,350 900 4,050 Omega Total 440 1,200 3,240 Each product requires 48 minutes per unit of machine time. Required: If required, round all per unit amounts to the nearest cent. 1. Determine the activity rate for och activity Production per machine hour per setup Setup Materials handling per part per inspection hour per engineering hour Inspection Product engineering Previous 2. Determine the total and per unit activity cost for all three products. Check My Work eBook Calculator Inspection per inspection hour Product engineering per engineering hour 2. Determine the total and per-unit activity cost for all three products. Total Activity Cost Activity Cost Per Unit Alpha Beta Omega 3. Why aren't the activity unit costs equal across all three products since they require the same machine time per unit? The unit costs are different because the products consume many activities in ratios different from the volume Feedback Check My Work 1. Calculate Activity Rate for each activity: Budgeted Activity Cost + Total Activity-Base Usage - Activity Rate 2. Calculate Activity Cost for each product: Activity-Base Usage x Activity rate from Req. (1) - Activity cost; Sum all activity costs per product to determine a total and divide the total overhead by budgeted units to derive the activity costs per unit for each product. Previous Check My Work