Question

Atlas Enterprises 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 $24 per machine hour Assembly $17 per direct labor hour Setup $56 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 1,768 1,043 Direct labor hours 391 152 Setups 57 18 Inspections 658 395 Production orders 70 14 Purchase orders 198 121 Units produced 266 178 Use the activity rate and usage information to calculate the total activity cost and activity cost per unit for each product. If required, round the per unit answers to the nearest cent.

Answer 1

A B C 1 Total activity cost Activity cost per unit 2 Elliptical Machines $ 74,267 $ 279.20 3 Treadmill $ 41,356 $ 232.34 4 5 Activity Elliptical Machines Treadmill 6 Fabrication $ 42,432 $ 25,032 7 Assembly $ 6,647 $ 2,584 8 Setups $ 3,192 $ 1,008 9 Inspections $ 17,766 $ 10,665 10 Production Scheduling $ 1,260$ 252 11 Purchasing $ 2,970 $ 1,815 12 Total activity cost $ 74,267$ 41,356 13 Units produced 266 178 14 Activity cost per uniy $ 279.20 $ 232.34 lo

A B C 1 Total activity cost Activity cost per unit 2 Elliptical Machines =+B12 =+B14 3 Treadmill =+C12 =+C14 4 5 Activity Elliptical Machines Treadmill 6 Fabrication =24*1768 =24*1043 7 Assembly =17*391 =17*152 8 Setups =56*57 =56*18 9 Inspections =27*658 =27*395 10 Production Scheduling =18*70 =18*14 11 Purchasing =15*198 =15*121 12 Total activity cost =SUM(B6:311) | =SUM(C6:011) 13 Units produced 266 178 14 Activity cost per uniy=+B12/B13 =+C12/C13