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 $508,200 Setup 250,800 Inspection 127,500 Shipping 152,000 Customer service 38,400 Total $1,076,900 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 and are as follows: 800 Customer Number of Number of Number of Service Units Setups Inspections Customer Orders Requests White sugar 3,390 150 300 30 8,475 Brown sugar 2,160 230 450 2,200 190 5,400 Powdered sugar 2,150 220 750 1,000 80 5,375 Total 7,700 600 1,500 4,000 300 19,250 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. Production per machine hour Setup per setup per move Inspection Shipping Customer service per cust. ord. $ per customer service request 2. Determine the total and per-unit activity cost for all three products. Total Activity Cost Activity Cost Per Unit White sugar Brown sugar Powdered sugar 3. Why aren't 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 volume sales mix