Reference no: EM131818986

Question - Activity cost pools, activity rates, and product costs using activity-based costing

Top Chef Inc. is estimating the activity cost associated with producing ovens and refrigerators. The indirect labor can be traced into four separate activity pools, based on time records provided by the employees. The budgeted activity cost and activity-base information are provided as follows:

Activity	Activity Pool Cost	Activity Base
Procurement	$151,200	Number of purchase orders
Scheduling	8,000	Number of production orders
Materials handling	24,850	Number of moves
Product development	26,820	Number of engineering changes
Total cost	$210,870

The estimated activity-base usage and unit information for Top Chef's two product lines was determined from corporate records as follows:

	Number of Purchase Orders	Number of Production Orders	Number of Moves	Number of Engineering Changes	Units
Ovens	610	210	420	130	1,370
Refrigerators	590	110	290	50	1,040
Totals	1,200	320	710	180	2,410

a. Determine the activity rate for each activity cost pool. Round to the nearest whole dollar.

b. Determine the activity-based cost per unit of each product. Round to the nearest cent.