Product Costs using Activity Rates

Hercules 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 Activity Rate Fabrication $30 per machine hour Assembly $17 per direct labor hour Setup $55 per setup Inspecting $20 per inspection Production scheduling $18 per production order Purchasing $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 1,794 1,058 Direct labor hours 444 173 Setups 60 19 Inspections 715 429 Production orders 76 15 Purchase orders 172 105 Units produced 306 205 Use the activity rate and usage information to determine the total activity cost and activity cost per unit for each product. If required, round the per unit answers to the nearest cent.

Total Activity Cost Activity Cost Per Unit Elliptical Machines $ $ Treadmill $ $