1. Pure Cane Sugar Company manufactures three products (white sugar, brown sugar, and powdered sugar) in a continuous production process. Senior management has asked the controller to conduct an activity-based costing study. The controller identified the amount of factory overhead required by the critical activities of the organization as follows:

   Activity		Activity Costs
   Production		$247,500
   Setup		48,000
   Inspection		12,500
   Shipping		69,300
   Customer service		27,600
   Total		$404,900

   The activity bases identified for each activity are as follows:

   Activity		Activity Base
   Production		Machine hours
   Setup		Number of setups
   Inspection		Number of inspections
   Shipping		Number of customer orders
   Customer service		Number of customer service requests

   The activity-base usage quantities and units produced for the three products were determined from corporate records as follows:

   	Machine Hours		Number of Setups		Number of Inspections		Number of Customer Orders		Number of Customer Service Requests		Units
   White sugar	2,000		50		100		410		25		8,000
   Brown sugar	1,250		70		160		1,100		200		5,000
   Powdered sugar	1,250		80		240		800		120		5,000
   Total	4,500		200		500		2,310		345		18,000

   Each product requires 0.25 machine hour per unit.

   Required:

   1. Determine the activity rate for each activity.

   	Activity Rate
   Production		$fill in the blank 1	/mh
   Setup		$fill in the blank 2	/setup
   Inspection		$fill in the blank 3	/insp.
   Shipping		$fill in the blank 4	/cust. ord.
   Customer Service		$fill in the blank 5	/req.

   2. Determine the total and per-unit activity costs for all three products. Round "Activity cost per unit" answers to two decimal places.

   	White Sugar	Brown Sugar	Powdered Sugar
   Total activity cost	$fill in the blank 6	$fill in the blank 7	$fill in the blank 8
   Activity cost per unit	$fill in the blank 9	$fill in the blank 10	$fill in the blank 11

   3. Why arent the activity unit costs equal across all three products since they require the same machine time per unit?

   The unit costs are different even though each product requires 0.25 machine hour because the products have different profit ratios.The unit costs are different even though each product requires 0.25 machine hour because the products consume many activities in ratios different from the volume.The unit costs are different even though each product requires 0.25 machine hour because the selling price of the products are different and the machine hour rate is different.