Activity rates and product costs using activity$-$based costing

Idris Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures, These activities and their associated budgeted activity costs and activity bases are as follows:

$\backslash$table$[[$Activity$,\backslash$table$[[$Budgeted$],[$Activity Cost$]]],[$Casting$,$$$640,000$ Machine hours$],[$Assembly$,125,000$ Direct labor hours$],[$Inspecting$,30,000$ Number of inspections$],[$Setup$,28,000$ Number of setups$],[$Materials handling,$20,000$ Number of loads$]]$

Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity$-$base usage quantities and units produced follow:

$\backslash$table$[[$Activity Base,Entry,Dining,Total$],[$Machine hours,$7,500,12,500,20,000],[$Direct labor hours,$3,000,2,000,5,000],[$Number of inspections,$200,400,600],[$Number of setups,$150,200,350],[$Number of loads,$400,600,1,000],[$Units produced,$5,000,4,000,9,000]]$

a$.$ Determine the activity rate for each activity.

Activity

Activity Rate

Casting

per machine hour

Assembly

$25$

per direct labor hour

Inspecting

per inspection

Setup

per setup

Materials handling

per load

b$.$ Use the activity rates in $($a$)$ to determine the total and per$-$unit activity costs associated with each product.

Round the per unit amounts to the nearest cent.

Product

Total Activity Cost Activity Cost Per Unit

Entry Lighting Fixtures

Dining Room Lighting Fixtures

$50$

$

up

$32$

$$,$