A.
Product Costs using Activity Rates
Atlas Enterprises Inc. manufactures elliptical exercise machinesand treadmills. The products are produced in its Fabrication andAssembly production departments. In addition to productionactivities, several other activities are required to produce thetwo products. These activities and their associated activity ratesare as follows:
| Activity | Activity Rate |
| Fabrication | $22 | per machine hour |
| Assembly | $8 | per direct labor hour |
| Setup | $49 | per setup |
| Inspecting | $29 | per inspection |
| Production scheduling | $9 | per production order |
| Purchasing | $6 | per purchase order |
The activity-base usage quantities and units produced for eachproduct were as follows:
| Activity Base | Elliptical Machines | Treadmill |
| Machine hours | 1,824 | | 1,076 | |
| Direct labor hours | 380 | | 148 | |
| Setups | 49 | | 15 | |
| Inspections | 606 | | 364 | |
| Production orders | 71 | | 14 | |
| Purchase orders | 186 | | 113 | |
| Units produced | 267 | | 179 | |
Use the activity rate and usage information to calculate thetotal activity cost and activity cost per unit for each product. Ifrequired, round the per unit answers to the nearest cent.
| Total Activity Cost | Activity Cost Per Unit |
| Elliptical Machines | $ | $ |
| Treadmill | $ | $ |
B.
High-Low Method for a Service Company
Boston Railroad decided to use the high-low method and operatingdata from the past six months to estimate the fixed and variablecomponents of transportation costs. The activity base used byBoston Railroad is a measure of railroad operating activity, termed"gross-ton miles," which is the total number of tons multiplied bythe miles moved.
| Transportation Costs | Gross-Ton Miles |
| January | $1,053,200 | | 312,000 | |
| February | 1,174,300 | | 349,000 | |
| March | 829,900 | | 226,000 | |
| April | 1,125,900 | | 338,000 | |
| May | 944,300 | | 272,000 | |
| June | 1,210,600 | | 367,000 | |
Determine the variable cost per gross-ton mile and the totalfixed cost.
| Variable cost (Round to two decimal places.) | $ per gross-ton mile |
| Total fixed cost | $ |
