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Question - Lonsdale Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budgeted activity costs and activity bases are as follows:
Activity
Budgeted Activity Cost
Activity Base
Casting
$252,980
Machine hours
Assembly
210,710
Direct labor hours
Inspecting
37,440
Number of inspections
Setup
42,780
Number of setups
Materials handling
54,570
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:
Entry
Dining
Total
5,160
4,570
9,730
4,440
6,650
11,090
1,780
560
2,340
250
60
310
850
220
1,070
Units produced
10,200
5,100
15,300
Required -
a. Determine the activity rate for each activity.
b. Use the activity rates in (a) to determine the total and per-unit activity costs associated with each product.
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