PR 18-4B Activity-based product costing EXCEL TEMPLATE Obj. 4 Sweet Sugar Company manufactures three products (white sugar, brown sugar and powdered sugar) 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 Inspection Shipping Customer service Total Budgeted Activity Cost $500,000 144,000 44,000 115,000 84.000 $887,000 The activity bases identified for each activity are as follows: The activity bases identified for each activity are as follows: Activity Activity Base Production Machine hours Setup Number of setups Inspection Number of inspections Shipping Number of customer orders Customer service Number of customer service requests The activity-base usage quantities and units produced for the three products were determined from corporate records and are as follows: Machine Hours White sugar Brown sugar Powdered sugar Total 5,000 2,500 2.500 10,000 Number of Setups 85 170 195 450 Number of Inspections 220 330 550 1,100 Number of Customer Orders 1.150 2,600 2,000 5,750 Customer Service Requests 60 350 190 600 Units 10,000 5,000 5,000 20,000 Machine Number of Hours Setups 85 2,500 170 2,500 195 10,000 450 White sugar Brown sugar Powdered sugar Total 5,000 Number of Inspections 220 330 550 1,100 Number of Customer Orders 1,150 2,600 2,000 5,750 Customer Service Requests 60 350 190 600 Units 10,000 5,000 5,000 20,000 Each product requires 0.5 machine hour per unit. Instructions 1. Determine the activity rate for each activity. 2. Determine the total and per-unit activity cost for all three products. (Round to nearest cent.) Answer 3. Why aren't the activity unit costs equal across all three products since they require the same machine time per unit