Activity rates and product costs using activity-based cost Idris 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 $320,620 Machine hours Assembly 182,750 Direct labor hours Inspecting 28,420 Number of inspections Setup 50,690 Number of setups Materials handling 36,540 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 5,000 4,430 9,430 Direct labor hours 4,300 6,450 10,750 Number of inspections 1,540 490 2,030 Number of setups 300 70 370 Number of loads 690 180 870 Units produced 10,000 5,000 15,000 This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.   Open spreadsheet   a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar. Activity Activity Rate Casting $fill in the blank 2 per machine hour Assembly $fill in the blank 3 per direct labor hour Inspecting $fill in the blank 4 per inspection Setup $fill in the blank 5 per setup Materials handling $fill in the blank 6 per load b. Use the activity rates in (a) to determine the total and per-unit activity costs associated with each product. Round the per unit amounts to the nearest cent. Product Total Activity Cost Activity Cost Per Unit Entry Lighting Fixtures $fill in the blank 7 $fill in the blank 8 Dining Room Lighting Fixtures $fill in the blank 9 $fill in the blank 10

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Activity rates and product costs using activity-based cost

Idris 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 $320,620 Machine hours
Assembly 182,750 Direct labor hours
Inspecting 28,420 Number of inspections
Setup 50,690 Number of setups
Materials handling 36,540 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 5,000 4,430 9,430
Direct labor hours 4,300 6,450 10,750
Number of inspections 1,540 490 2,030
Number of setups 300 70 370
Number of loads 690 180 870
Units produced 10,000 5,000 15,000

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

 

Open spreadsheet

 

a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar.

Activity Activity Rate
Casting $fill in the blank 2 per machine hour
Assembly $fill in the blank 3 per direct labor hour
Inspecting $fill in the blank 4 per inspection
Setup $fill in the blank 5 per setup
Materials handling $fill in the blank 6 per load

b. Use the activity rates in (a) to determine the total and per-unit activity costs associated with each product. Round the per unit amounts to the nearest cent.

Product Total Activity Cost Activity Cost Per Unit
Entry Lighting Fixtures $fill in the blank 7 $fill in the blank 8
Dining Room Lighting Fixtures $fill in the blank 9 $fill in the blank 10 
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