Activity Rates and Activity-Based Product Costing
Hammer Company produces a variety of electronic equipment. One
of its...
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Accounting
Activity Rates and Activity-Based Product Costing
Hammer Company produces a variety of electronic equipment. Oneof its plants produces two laser printers: the deluxe and theregular. At the beginning of the year, the following data wereprepared for this plant:
Deluxe
Regular
Quantity
100,000
800,000
Selling price
$900
$750
Unit prime cost
$529
$483
In addition, the following information was provided so thatoverhead costs could be assigned to each product:
Activity Name
Activity Driver
Deluxe
Regular
Activity Cost
Setups
Number of setups
300
200
$2,150,000
Machining
Machine hours
100,000
300,000
40,000,000
Engineering
Engineering hours
50,000
100,000
9,000,000
Packing
Packing orders
100,000
400,000
250,000
Required:
1. Calculate the overhead rates for eachactivity. If required, carry your answers out to the nearestcent.
Setups
$ per setup
Machining
$ per machine hour
Engineering
$ per engineering hour
Packing
$ per packing order
2. Calculate the per-unit product cost for eachproduct. Round your answers to the nearest whole dollar.
Deluxe
$per unit
Regular
$per unit
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