Atlas Enterprises Inc. manufactures elliptical exercise machines and treadmills. The products are produced in its Fabrication...

4.4 Ratings (763 Votes)

Calculations of Total Activity Cost Elliptical Machine and Treadmill:-

Activity Base	Rate	Elliptical Machine	Treadmill
Machine Hours	$20 per machine hours	(1,747×$20)=$34,940	(1,031×$20=$20,620
Direct Labor hours	$10 per direct labor hours	(385×$10)=$3,850	(150×$10)=$1,500
Set ups	$55 per setup	(56×$55)=$3,080	(17×$55)=$935
Inspections	$24 per inspection	(683×$24)=$16,392	(410×$24)=$9,840
Production Orders	$11 per Production Order	(72×$11)=$792	(14×$11)=$154
Purchase Orders	$8 per Purchase order	(189×$8)=$1,512	(115×$8)=$920

Total Activity Cost		$60,566	$33,969

Computation of Activity Cost per Unit for Elliptical Machine:-

Elliptical Machine Activity Cost per unit=(Total Activity Cost/No. Of units produced)

=($60,566/313)

=$193.50 per Unit

Computation of Activity Cost per Unit for Treadmill:-

Treadmill Activity cost per Unit=(Total Activity Cost/No. Of units produced)

=($30,969/210)

=$147.47 per Unit

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