Activity Rates and Product Costs using Activity-Based CostingGarfield 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 BudgetedActivity Cost Activity Base Casting $560,000 Machine hours Assembly 75,000 Direct labor hours Inspecting 30,000 Number of inspections Setup 18,750 Number of setups Materials handling 14,000 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: Activity Base Entry Dining Total Machine hours 7,500 12,500 20,000 Direct labor hours 2,000 3,000 5,000 Number of inspections 500 250 750 Number of setups 150 100 250 Number of loads 400 300 700 Units produced 5,000 2,500 7,500 a.Determine the activity rate for each activity. Activity Activity Rate Casting $ per machine hour Assembly $ 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 rates to the nearest cent. Product Total Activity Cost Activity Cost Per Unit Entry Lighting Fixtures $ $ Dining Room Lighting Fixtures $ $

Activity Rates and Product Costs using Activity-Based Costing Garfield Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These...

Activity Rates and Product Costs using Activity-Based Costing

Garfield 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	$560,000		Machine hours
Assembly	75,000		Direct labor hours
Inspecting	30,000		Number of inspections
Setup	18,750		Number of setups
Materials handling	14,000		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:

Activity Base	Entry	Dining	Total
Machine hours	7,500		12,500	20,000
Direct labor hours	2,000		3,000	5,000
Number of inspections	500		250	750
Number of setups	150		100	250
Number of loads	400		300	700
Units produced	5,000		2,500	7,500

a.Determine the activity rate for each activity.

Activity	Activity Rate
Casting	$	per machine hour
Assembly	$	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 rates to the nearest cent.

Product	Total Activity Cost	Activity Cost Per Unit
Entry Lighting Fixtures	$	$
Dining Room Lighting Fixtures	$	$

Jun 01, 2022

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