Question
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
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 100,000 300,000 Prime costs $8,000,000 $30,000,000 $38,000,000 Machine hours 100,000 500,000 600,000 Engineering hours 400 3,600 4,000 Receiving orders 400 1,200 1,600 Inspection hours 800 1,600 2,400 Overhead costs: Machining $6,000,000 Engineering 2,000,000 Receiving 560,000 Inspecting products 360,000 Required: 1. Calculate the four activity rates. Machining rate $ per machine hour Engineering rate $ per hour Receiving rate $ per order Inspecting rate $ 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 $
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