Activity rates and product costs using activity-based cost

Idris Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budgeted activity costs and activity bases are as follows:

Activity	Budgeted Activity Cost	Activity Base
Casting	$234,240	Machine hours
Assembly	178,080	Direct labor hours
Inspecting	31,200	Number of inspections
Setup	43,790	Number of setups
Materials handling	45,600	Number of loads

Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced follow:

Activity Base	Entry	Dining	Total
Machine hours	5,170	4,590	9,760
Direct labor hours	4,450	6,680	11,130
Number of inspections	1,820	580	2,400
Number of setups	230	60	290
Number of loads	750	200	950
Units produced	10,200	5,100	15,300

Open spreadsheet

a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar.

Activity	Activity Rate
Casting	$ ______ per machine hour
Assembly	$ ______ per direct labor hour
Inspecting	$ ______ per inspection
Setup	$ ______ per setup
Materials handling	$ ______ per load

b. Use the activity rates in (a) to determine the total and per-unit activity costs associated with each product. Round the per unit amounts to the nearest cent.

Product	Total Activity Cost	Activity Cost Per Unit
Entry Lighting Fixtures	$ _____	$ _____
Dining Room Lighting Fixtures	$ _____	$ _____