Activity rates and product costs using activity-based cost

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:

Activity	Budgeted Activity Cost	Activity Base
Casting	$232,560	Machine hours
Assembly	198,900	Direct labor hours
Inspecting	34,650	Number of inspections
Setup	45,120	Number of setups
Materials handling	36,960	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:

Activity Base	Entry	Dining	Total
Machine hours	5,140	4,550	9,690
Direct labor hours	4,420	6,630	11,050
Number of inspections	1,760	550	2,310
Number of setups	260	60	320
Number of loads	700	180	880
Units produced	10,200	5,100	15,300

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

Open spreadsheet

a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar.

Activity	Activity Rate
Casting	$
Assembly	$
Inspecting	$
Setup	$
Materials handling	$

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	$	$