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Activity rates and product costs using activity-based costing \table[[Activity,\table[[Budgeted],[Activity Cost]],Activity Base],[Casting,$640,000,Machine hours],[Assembly,125,000,Direct labor...

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Accounting

Activity rates and product costs using activity-based costing
\table[[Activity,\table[[Budgeted],[Activity Cost]],Activity Base],[Casting,$640,000,Machine hours],[Assembly,125,000,Direct labor hours],[Inspecting,30,000,Number of inspections],[Setup,28,000,Number of setups],[Materials handling,20,000,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:
\table[[Activity Base,Entry,Dining,Total],[Machine hours,7,500,12,500,20,000],[Direct labor hours,3,000,2,000,5,000],[Number of inspections,200,400,600],[Number of setups,150,200,350],[Number of loads,400,600,1,000],[Units produced,5,000,4,000,9,000]]
a. Determine the activity rate for each activity.
Activity
Activity Rate
Casting
$
per machine hour
image

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