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:

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:

Each product requires 0.5 machine hour per unit.

Instructions

1. Determine the activity rate for each activity.

2. Determine the total and per-unit activity cost for all three products. (Round to nearest cent.)

   Answer

   Check Figure: Brown sugar total activity cost, $293,600

3. Why aren't the activity unit costs equal across all three products since they require the same machine time per unit?