Activity Cost Pools, Activity Rates, and Product Costs using Activity-Based Costing

Caldwell Home Appliances Inc. is estimating the activity cost associated with producing ovens and refrigerators. The indirect labor can be traced into four separate activity pools, based on time records provided by the employees. The budgeted activity cost and activity-base information are provided as follows:

Activity	Activity Pool Cost			Activity Base
Procurement		$144,480		Number of purchase orders
Scheduling		6,300		Number of production orders
Materials handling		30,420		Number of moves
Product development		23,400		Number of engineering changes
Total cost		$204,600

The estimated activity-base usage and unit information for two product lines was determined as follows:

		Number of Purchase Orders			Number of Production Orders			Number of Moves			Number of Engineering Change Orders			Units
Ovens			570			230			460			130			1,390
Refrigerators			550			120			320			50			1,040
	Totals		1,120			350			780			180			2,430

a. Determine the activity rate for each activity cost pool. If required, round your answers to the nearest dollar.

Procurement (per purchase order)	$
Scheduling (per production order)	$
Materials handling (per move)	$
Product development (per engineering change order)	$

b. Determine the activity-based cost per unit of each product. Round your answers to the nearest cent.

Ovens	$ per unit
Refrigerators	$ per unit