Question

CengageNOWV2 Online teaching and learning resource from Cengage Learning Calculator 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 5483 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 $2,050,000 Machining Machine hours 100,000 300,000 64,000,000 Engineering Engineering hours 50,000 100,000 6,000,000 Packing Packing orders 100,000 400,000 250,000 Required: 1. Calculate the overhead rates for each activity. If required, carry your answers out to the nearest cent. Setups per setup Machining Engineering per machine hour per engineering hour per packing order Packing 2. Calculate the per un product cost for each product. Round your answers to the nearest whole do Previous Check My Work Smore Check My Works remaining Email Instructor Save and Et Submit Assignment for Grading 6 7 8 9 0

Answer 1

1.

	(A)	(B)	[C=A/B]
	Overhead Cost	Total Activity Driver (Deluxe + Regular)	Activity rate
Setups	$2,050,000	500	$4,100	Per setup
Machining	$64,000,000	400,000	$160	Per machine hour
Engineering	$600,000	150,000	$4	Per Engineering hour
Packing	$250,000	500,000	$1	Per packing hour

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2.

Deluxe
	Activity driver	Activity rate	Total overhead
Setups	300	$4,100	$1,230,000
Machining	100,000	$160	$16,000,000
Engineering	50,000	$4	$200,000
Packing	100,000	$1	$100,000
Total overhead			$17,530,000
Units produced			100,000
Overhead cost per unit			$175.30
Regular
	Activity driver	Activity rate	Total overhead
Setups	200	$4,100	$820,000
Machining	300,000	$160	$48,000,000
Engineering	100,000	$4	$400,000
Packing	400,000	$1	$400,000
Total overhead			$49,620,000
Units produced			800,000
Overhead cost per unit			$62.03