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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 $20 per machine hour
Assembly $10 per direct labor hour
Setup $54 per setup
Inspecting $29 per inspection
Production scheduling $11 per production order
Purchasing $8 per purchase order

The activity-base usage quantities and units produced for each product were as follows:

Activity Base Elliptical Machines Treadmill
Machine hours 1,711 1,009
Direct labor hours 477 186
Setups 51 16
Inspections 718 431
Production orders 63 13
Purchase orders 201 123
Units produced 261 175

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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