Determine the activity rate for each activity

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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:

Activity Base

Entry

Dining

Total

Machine hours

5,160

4,570

9,730

Direct labor hours

4,440

6,650

11,090

Number of inspections

1,780

560

2,340

Number of setups

250

60

310

Number of loads

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.

Reference no: EM133052260

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