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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 Activity Rate Fabrication $25 per machine hour Assembly $14 per direct labor hour Setup $50 per setup $29 per inspection Inspecting Production scheduling Purchasing $15 per production order $12 per purchase order The activity-base usage quantities and units produced for each product were as follows: Activity Base Elliptical Machines Treadmill Machine hours 1,841 1,086 Direct labor hours 444 173 Setups 47 15 Inspections 742 445 Production orders 67 13 Purchase orders 176 107 Units produced 245 164 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 $
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