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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
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 Rate Activity Fabrication $33 per machine hour Assembly $40 per direct labor hour Setup Inspecting Production scheduling Purchasing $94 per setup $17 per inspection $16 per production order $7 per purchase order The activity-base usage quantities and units produced for each product were as follows: Activity Base Elliptical Machines Treadmill Machine hours 750 500 Direct labor hours 215 253 Setups 41 41 Inspections 12 17 Production orders 40 35 Purchase orders 378 150 Units produced 520 330 This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below. X Open spreadsheet Use the activity rate and usage information to calculate 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
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