Product costs using activity rates Body-Solid 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 Activity Rate $32 per machine hour $15 per direct labor hour. $54 per setup $30 per inspection Production scheduling Purchasing $16 per production order I $13 per purchase order The activity-base usage quantities and units produced for each product were as follows: Activity Base Elliptical Machines Treadmill Machine hours 1,784 1,053 Direct labor hours. 477 186 Setups 45 14 Inspections 676 406