Tree Top Company produces two types of stereo units. Activity data for the year ended 31

December 2011 was as follows:

Product costing data

Activity usage

Measures	Deluxe	Regular	Total
unitsproduced	5 000	50 000	55 000
primecost	39 000	369 000	408 000
directlabour	5 000	45 000	50 000
machine hour	10 000	90 000	100 000
production runs	10	5	15
number of moves	120	60	180

Activity cost data

Activity Overhead activity

Setting up equipment $60 000

Material handling $30 000

Using power $50 000

Testing $40 000

Total $180 000

Required

1. Calculate the consumption rates for each activity.

2. Group activities based on consumption rates and activity level.

3. Calculate a rate for each pooled group of activities.

4. Using the pool rates, calculate unit product costs.