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Sweet Sugar Company manufactures three products ( white sugar, brown sugar, and powdered sugar ) in a continuous production process. Senior management has asked the

Sweet 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 Budgeted Activity Cost
Production $497,000
Setup 308,000
Inspection 126,000
Shipping 131,200
Customer Service 78,400
Total $1,140,600
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 and are as follows:
Line Item Description Machine Hours Number of Setups Number of Inspections Number of Customer Orders Customer Service Requests Units
White sugar 3,080180280820707,700
Brown sugar 1,9602704202,2604404,900
Powdered sugar 1,9602507001,0201904,900
Total 7,0007001,4004,10070017,500
Each product requires 0.9 machine hour per unit.
Required:
If required, round all per unit amounts to the nearest cent.
1. Determine the activity rate for each activity.
Activity Amount
Production $fill in the blank 1
per machine hour
Setup $fill in the blank 2
per setup
Inspection $fill in the blank 3
per inspection hour
Shipping $fill in the blank 4
per cust. ord.
Customer service $fill in the blank 5
per customer service request
2. Determine the total and per-unit activity cost for all three products.
Line Item Description Total Activity Cost Activity Cost Per Unit
White sugar $fill in the blank 6
$fill in the blank 7
Brown sugar fill in the blank 8
fill in the blank 9
Powdered sugar 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 because the products consume many activities in ratios different from the fill in the blank 1 of 1
.

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