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Activity Cost Pools, Activity Rates, and Product Costs using Activity$-$Based Costing

Caldwell Home Appliances Inc. is estimating the activity cost associated with producing ovens and refrigerators. The indirect labor can be traced into four separate activity pools, based on time records provided by the employees. The budgeted activity cost and activity$-$base information are provided as follows:

Activity Activity Pool Cost Activity Base

Procurement $$12,600$ Number of purchase orders

Scheduling $90,000$ Number of production orders

Materials handling $11,000$ Number of moves

Product development $50,000$ Number of engineering changes

Total cost $$163,600$

The estimated activity$-$base usage and unit information for two product lines was determined as follows:

Number of

Purchase Orders Number of

Production Orders Number of

Moves Number of

Engineering Change Orders

Units

Ovens $400800300801,000$

Refrigerators $300400200120500$

Totals $7001,2005002001,500$

a$.$ Determine the activity rate for each activity cost pool.

Procurement $($per purchase order$)$ $fill in the blank $1$

Scheduling $($per production order$)$ $fill in the blank $2$

Materials handling $($per move$)$ $fill in the blank $3$

Product development $($per engineering change order$)$ $fill in the blank $4$

b$.$ Determine the activity$-$based cost per unit of each product. Round the per unit rates to the nearest cent.

Ovens $fill in the blank $5$ per unit

Refrigerators $fill in the blank $6$ per unit