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Activity Rates and Activity-Based Product Costing Hammer Company produces a variety of electronic equipment. One of its...

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Accounting

  1. Activity Rates and Activity-Based Product Costing

    Hammer Company produces a variety of electronic equipment. Oneof its plants produces two laser printers: the deluxe and theregular. At the beginning of the year, the following data wereprepared for this plant:

    DeluxeRegular
    Quantity100,000800,000
    Selling price$900$750
    Unit prime cost$529$483

    In addition, the following information was provided so thatoverhead costs could be assigned to each product:

    Activity NameActivity DriverDeluxeRegularActivity Cost
    SetupsNumber of setups300200$2,150,000
    MachiningMachine hours100,000300,00040,000,000
    EngineeringEngineering hours50,000100,0009,000,000
    PackingPacking orders100,000400,000250,000

    Required:

    1. Calculate the overhead rates for eachactivity. If required, carry your answers out to the nearestcent.

    Setups$ per setup
    Machining$ per machine hour
    Engineering$ per engineering hour
    Packing$ per packing order

    2. Calculate the per-unit product cost for eachproduct. Round your answers to the nearest whole dollar.

    Deluxe$per unit
    Regular$per unit

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