Activity Rates and Activity-Based Product Costing
Hammer Company produces a variety of electronic equipment. One of its plants produces two laser printers: the deluxe and the regular. At the beginning of the year, the following data were prepared for this plant:Deluxe RegularQuantity 100,000 800,000Selling price $900 $750Unit prime cost $529 $483
In addition, the following information was provided so that overhead costs could be assigned to each product:Activity Name Activity Driver Activity Cost Deluxe RegularSetups Number of setups $3,000,000 300 200Machining Machine hours 91,000,000 100,000 300,000Engineering Engineering hours 6,700,000 50,000 100,000Packing Packing orders 600,000 100,000 400,000
1. Calculate the overhead rates for each activity. If required, carry your answers out to the nearest cent.Setups $ per setupMachining $ per machine hourEngineering $ per engineering hourPacking $ per packing order
2. Calculate the per-unit product cost for each product. Round your answers to the nearest whole dollar.Deluxe $per unitRegular
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