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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 Fabrication Assembly Setup Inspecting Production scheduling Purchasing Activity Rate $31 per machine hour $17 per direct labor hour $45 per setup $21 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 1,720 1,015 Direct labor hours 436 170 Setups 60 19 Inspections 730 438 Production orders! 73 15 Purchase orders 210 128 Units produced 275 184 Assembly Setup Inspecting Production scheduling Purchasing $17 per direct labor hour $45 per setup $21 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 1,720 1,015 Direct labor hours 436 170 Setups 60 19 Inspections 730 438 Production orders 73 15 Purchase orders Units produced 210 275 128 184 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 Elliptical Machines $ Treadmill $ Activity Cost Per Unit S
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