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Product Costs using Activity Rates Hercules Inc. manufactures elliptical exercise machines and treadmills. The products are produced...

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Accounting

Product Costs using Activity Rates

Hercules Inc. manufactures elliptical exercise machines andtreadmills. 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:

ActivityActivity Rate
Fabrication$27per machine hour
Assembly$9per direct labor hour
Setup$58per setup
Inspecting$20per inspection
Production scheduling$10per production order
Purchasing$7per purchase order

The activity-base usage quantities and units produced for eachproduct were as follows:

Activity BaseElliptical MachinesTreadmill
Machine hours1,680991
Direct labor hours494193
Setups6119
Inspections654392
Production orders7816
Purchase orders173106
Units produced288193

Use the activity rate and usage information to determine thetotal activity cost and activity cost per unit for each product.If required, round the per unit answers to the nearestcent.

Total Activity CostActivity Cost Per Unit
Elliptical Machines$$
Treadmill$$

Answer & Explanation Solved by verified expert
4.3 Ratings (548 Votes)
Ans Total Activity Cost Activity cost per unit Elliptical machines 68415 23755 Treadmill 38338 19864 WORKING NOTES Calculations for Total Activity cost Activity    See Answer
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