Question

Activity Rates and Product Costs using Activity-Based Costing Lonsdale Inc. manufactures entry and dining room ang faturesFive activities are used in manufacturing the futures. These activities and the a are as follows: c ted budgeted activity costs and activity bases Activity Casting Assembly Inspecting Budgeted Activity Cost Activity Base $320.00 Machine hours 192,950 Direct labor hours 38,920 Number of inspections 43,860 Number of setups 55,590 Number of loads Setup Materials handling Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity base usage quantities and unit produced follow Activity Base Entry Dining Total Machine hours 5,280 4.600 9,960 Direct labor hours 4,540 6,810 11,350 Number of inspections 2,110 670 2,780 Number of setups 28060 340 230 1.090 Units produced 10,400 5,200 15.600 . Determine the activity rate for each activity. If required, round the rate to the nearest dollar Activity Activity Rate Casting

Answer 1

a) Calculate activity rate

Activity	Activity rate
Casting	328680/9960 = 33 per machine hour
Assembly	192950/11350 = 17 per labor hour
Inspecting	38920/2780 = 14 per inspection
Setup	43860/340 = 129 per setup
Material handling	55590/1090 = 51 per load

b) Calculate activity and per unit

	Entry lighting fixtures	Dinning room lighting fixtures
Casting	174240	154440
Assembly	77180	115770
Inspecting	29540	9380
Setup	36120	7740
Material handling	43860	11730
Total Cost	360940	299060
Unit	10400	5200
Cost per unit	34.71	57.51