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A producer of two different weed eaters: basic and advanced has four activities: machining, engineering,...

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Accounting

A producer of two different weed eaters: basic and advanced has four activities: machining, engineering, receiving, and inspection. Information on these activities and their drivers is given below.

Basic Advanced Total
Units produced 100,000 300,000
Prime costs $7,600,000 $32,400,000 $40,000,000
Machine hours 100,000 500,000 600,000
Engineering hours 400 3,600 4,000
Receiving orders 500 1,500 2,000
Inspection hours 800 1,600 2,400
Overhead costs:
Machining $9,000,000
Engineering 1,600,000
Receiving 640,000
Inspecting products 480,000

Required:

1. Calculate the four activity rates.

Machining rate
Engineering rate
Receiving rate
Inspecting rate

2. Calculate the unit costs using activity rates. Round your answers to the nearest cent.

Unit cost
Basic
Advanced

Calculate the overhead cost per unit. Round your answers to the nearest cent.

Overhead Cost
Basic
Advanced

3. If consumption ratios instead of activity rates were used to assign costs instead of activity rates, show the cost assignment for the inspection activity.

Cost assignment
Basic
Advanced

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