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

Name: Product Costs using Activity Rates Hercules Inc manufacture
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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:
Activity Activity Rate
Fabrication $27 per machine hour
Assembly $9 per direct labor hour
Setup $58 per setup
Inspecting $20 per inspection
Production scheduling $10 per production order
Purchasing $7 per purchase order
The activity-base usage quantities and units produced for eachproduct were as follows:
Activity Base Elliptical Machines Treadmill
Machine hours 1,680 991
Direct labor hours 494 193
Setups 61 19
Inspections 654 392
Production orders 78 16
Purchase orders 173 106
Units produced 288 193
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 Cost Activity 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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Activity	Activity Rate
Fabrication	$27	per machine hour
Assembly	$9	per direct labor hour
Setup	$58	per setup
Inspecting	$20	per inspection
Production scheduling	$10	per production order
Purchasing	$7	per purchase order

Activity Base	Elliptical Machines	Treadmill
Machine hours	1,680	991
Direct labor hours	494	193
Setups	61	19
Inspections	654	392
Production orders	78	16
Purchase orders	173	106
Units produced	288	193

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