Roberts Company produces two weed eaters: basic and advanced. The company has four activities: machining, engineering, receiving, and inspection. Information on these activities and their drivers is given below. Basic Advanced Total Units produced 90,000 270,000 Prime costs $8,100,000 $30,240,000 $38,340,000 Machine hours 90,000 450,000 540,000 Engineering hours 500 4,500 5,000 Receiving orders 200 600 800 Inspection hours 800 1,600 2,400 Overhead costs: Machining $4,860,000 Engineering 2,600,000 Receiving 264,000 Inspecting products 288,000 Required: 1. Calculate the four activity rates. Machining rate $ 9 per machine hour Engineering rate $ 520 per hour Receiving rate $ 330 per order Inspecting rate $ 120 per hour 2. Calculate the unit costs using activity rates. Round your answers to the nearest cent. Unit cost Basic $ per unit Advanced $ per unit Calculate the overhead cost per unit. Round your answers to the nearest cent. Overhead Cost Basic $ per unit Advanced $ per unit 3. If consumption ratios instead of activity rates were used to assign costs instead of activity rates, show the cost assignment for the inspection activity. Cost assignment Basic $ Advanced $

Feedback Check My Work 1. Machining rate: Overhead costs - Total machine hours. The other three activity rates are calculated the same way using each activity's Overhead costs and totals. 2. Use the calculations from Requirement 1 to calculate the unit costs and also calculate OH cost per unit. Example of Total cost: Activity rate (above) x Basic OH costs and also Activity rate x Advanced OH costs. Example of OH costs per units: Total manufacturing costs: Units of production = Unit Cost (for Basic and Advanced). 3. Calculate unit costs using consumption ratios. Compare to activity rate unit costs. To assign inspection cost use the inspection hrs. for basic/advanced = total inspection hrs. for both and give a conclusion