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Zeus Industries manufactures two types of electrical power units, custom and standard, which involve four factory overhead activities-production setup, procurement, quality control, and materials management.

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Zeus Industries manufactures two types of electrical power units, custom and standard, which involve four factory overhead activities-production setup, procurement, quality control, and materials management. An activity analysis of the overhead revealed the following estimated activity costs and activity bases for these activities: Activity Activity Cost Activity Base Production setup $ 66,000 Number of setups Procurement 121,000 Number of purchase orders (PO) Quality control 187,000 Number of inspections Materials management 166,500 Number of components Total $540.500 The activity-base usage quantities for each product are as follows: Setups Purchase Orders Inspections Components Unit Volume Custom 250 500 1,000 100 2.000 200 Standard 300 400 1,000 1,000 2,000 Total 550 1,100 2,200 900 a. Determine an activity rate for each activity Activity Rates Production Setup Activity cost Procurement Quality Control Materials Management + Activity base Activity rane setup /PO inspection component b. Assign activity costs to each product and determine the unit activity cost, using the activity rates from part (n) Round unt costs to the nearest cent. Custom Standard Setups Total Purchase Orders Total Inspections Total Components Total Total product cost Unit volume Unit Qualty control 187,000 Number of inspections Materials management Number of components 166,500 $540,500 Total The activity-base usage quantities for each product are as follows: Purchase Setups Inspections Orders Custom 250 1,000 2,000 Standard 300 100 200 Components Unit Volume 500 400 1,000 1,000 2,000 Total 550 1,100 2,200 900 a. Determine an activity rate for each activity Activity Rates Production Setup Activity cost Procurement Quality Control Materials Management + Activity base setup Activity rate /PO tions /component b. Assign activity costs to each product and determine the unit activity cost, using the activity rates from part (a). Round unit costs to the nearest cent. Custom Standard Setups Total Purchase Orders Total Inspections Total Components Total Total product cost Unit volume Unit cost c. Assume that each product required one direct labor hour per unit. Determine the per unit cost if factory overhead is allocated on the basis of direct labor hours. Round your answer per unit d. The custom product will consume materials management activities than will the standard product

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