Product Costs using Activity Rates

other activities are required to produce the two products. These activities and their associated activity rates are as follows:

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

Feedback

T Check My Work

Calculate Activity Cost for each product: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 $$21$ per machine hour

Assembly $$13$ per direct labor hour

Setup $$50$ per setup

Inspecting $$28$ per inspection

Production scheduling $$14$ per production order

Purchasing $$11$ per purchase order

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

Activity Base Elliptical Machines Treadmill

Machine hours $1,7851,053$

Direct labor hours $430168$

Setups $5417$

Inspections $739443$

Production orders $6313$

Purchase orders $180110$

Units produced $303203$

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 $fill in the blank $1$

$69,329$

$fill in the blank $2$

$228\mathrm{.}81$

Treadmill $fill in the blank $3$

$38,943$

$fill in the blank $4$

Feedback Area

Feedback

Calculate Activity Cost for each product:

Activity$-$Base Usage for each activity x Activity Rate $=$ Activity Cost; Add all activity costs for each product to obtain the total cost per product. Divide total costs by number of units to obtain activity cost per unit.