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Product Costs using Activity Rates Atlas Enterprises Inc. manufactures elliptical exercise machines and treadmills. The products are produced in its Fabrication and Assembly production

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Product Costs using Activity Rates Atlas Enterprises Inc. manufactures elliptical exercise machines and treadmills. The products are produced in its Fabrication and Assembly production departments. In addition to production activities, several other activities are required to produce the two products. These activities and their associated activity rates are as follows: Activity Fabrication Assembly Setup Inspecting Production scheduling Purchasing Activity Rate $31 per machine hour $17 per direct labor hour $47 per setup $27 per inspection. $18 per production order $15 per purchase order The activity-base usage quantities and units produced for each product were as follows: Activity Base Elliptical Machines Treadmill Machine hours 1,692 998 Direct labor hours 438 171 Setups 62 19 Inspections 605 363 Production orders 73 15 Purchase orders 184 112 Units produced 253 170

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