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Determine the total activity cost and activity cost per unit

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Question - Hercules Inc. manufactures elliptical exercise machines and treadmills. The products are produced in its Fabrication and Assembly production departments. In addition to production activities, several other activities are required to produce the two products. These activities and their associated activity rates are as follows:

Activity Activity Rate

Fabrication $22 per machine hour

Assembly $17 per direct labor hour

Setup $55 per setup

Inspecting $27 per inspection

Production scheduling $18 per production order

Purchasing $15 per purchase order

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

Activity Base Elliptical Machines Treadmill

Machine hours 1,670 985

Direct labor hours 435 170

Setups 48 15

Inspections 605 363

Production orders 77 15

Purchase orders 201 123

Units produced 314 210

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

Reference no: EM132675617

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