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

Kitchen Wares 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		$149,340		Number of purchase orders
Scheduling		7,600		Number of production orders
Materials handling		28,290		Number of moves
Product development		20,960		Number of engineering changes
Total cost		$206,190

The estimated activity-base usage and unit information for Kitchen Wares' two product lines was determined from corporate records as follows:

		Number of Purchase Orders			Number of Production Orders			Number of Moves			Number of Engineering Changes			Units
Ovens			680			250			410			110			1,450
Refrigerators			630			130			280			50			1,090
	Totals		1,310			380			690			160			2,540

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)	$ _________________

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

Ovens	$ _________________ per unit
Refrigerators	$ _________________ per unit