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	$25	per machine hour
Assembly	$15	per direct labor hour
Setup	$45	per setup
Inspecting	$28	per inspection
Production scheduling	$16	per production order
Purchasing	$13	per purchase order

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

Activity Base	Elliptical Machines		Treadmill
Machine hours	1,785		1,053
Direct labor hours	423		165
Setups	48		15
Inspections	711		427
Production orders	73		15
Purchase orders	214		131
Units produced	249		167

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.

	Total Activity Cost	Activity Cost Per Unit
Elliptical Machines	$	$
Treadmill	$	$

Answer 1

		Elliptical Machines	Treadmill
	Activity Rate	Cost driver quantity allocated	OH allocated	Cost driver quantity allocated	OH allocated
Fabrication	$25.00	1,785	$44,625	1,053	$26,325
Assembly	$15.00	423	$6,345	165	$2,475
Setup	$45.00	48	$2,160	15	$675
Inspecting	$28.00	711	$19,908	427	$11,956
Production Scheduling	$16.00	73	$1,168	15	$240
Purhcase order	$13.00	214	$2,782	131	$1,703
Total Activity Cost			$76,988		$43,374
No. of units produced			249		167
Activity Cost per unit			$                                      309.19		$                     259.72