Question

Hello! I did the work out for this and my answers are wrong, can someone give me the correct answers with a step by step explanation?

Thanks!

Activity Rates and Activity-Based Product Costing Hammer Company produces a variety of electronic equipment. One of its plants produces two laser printers: the deluxe and the regular. At the beginning of the year, the following data were prepared for this plant: Deluxe Regular Quantity 100,000 800,000 Selling price $900 $750 Unit prime cost $529 $483 In addition, the following information was provided so that overhead costs could be assigned to each product: Activity Name Activity Driver Deluxe Regular Activity Cost Setups Number of setups 300 200 $2,100,000 Machining Machine hours 100,000 300,000 76,000,000 Engineering Engineering hours 50,000 100,000 9,000,000 400,000 Packing Packing orders 100,000 400,000 Required: 1. Calculate the overhead rates for each activity. If required, carry your answers out to the nearest cent. Setups $ $ 4,200 per setup 190 X per machine hour Machining

Answer 1

Ans. 1	Activity cost pool	Activity cost (a)	Total activity (b)	Activity Rate (a/b)
	Setups	$2,100,000	500	$4,200.00	per setup
	Machining	$76,000,000	400000	$190.00	per machine hour
	Engineering	$9,000,000	150000	$60.00	per engineering hour
	Packing	$400,000	500000	$0.80	per packing order
	*Calculation of total activity :
	Activity cost pool	Activity base	Deluxe (a)	Regular (b)	Total activity (a+b)
	Setups	Number of setups	300	200	500
	Machining	Machine hours	100000	300000	400000
	Engineering	Engineering hours	50000	100000	150000
	Packing	Packing orders	100000	400000	500000
Ans. 2		Per unit product cost
	Deluxe	$762	(rounded off)
	Regular	$563	(rounded off)
	*Calculations for Overhead cost assigned to each product:
				Deluxe		Regular
	Activity cost pool	Activiy rate		Activity driver incurred	Overhead assigned	Activity driver incurred	Overhead assigned
		(a)		(b)	(a*b)	©	(a*c)
	Setups	$4,200.00	per setup	300	$1,260,000	200	$840,000
	Machining	$190.00	per machine hour	100000	$19,000,000	300000	$57,000,000
	Engineering	$60.00	per engineering hour	50000	$3,000,000	100000	$6,000,000
	Packing	$0.80	per packing order	100000	$80,000	400000	$320,000
				Total Overhead Cost	$23,340,000		$64,160,000
				(/) Quantity	100000		800000
			Avgerage overhead cost per unit		$233.40		$80.20
			Deluxe (a)	Regular (b)
	Unit prime cost		$529.00	$483.00
	Overhead cost per unit		$233.40	$80.20
	Per unit Product Cost (Total)		$762.40	$563.20