Activity Rates and Product Costs using ActivityBased 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:
tabletableBudgetedActivity CostActivity BaseCastivity$Machine hoursAssemblyDirect labor hoursInspectingNumber of inspectionsSetupNumber of setupsMaterials handling,Number of loads
Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activitybase usage quantities and units produced follow:
tableActivity Base,Entry,Dining,TotalMachine hours,Direct labor hours,Number of inspections,Number of setups,Number of loads,Units produced,
a Determine the activity rate for each activity. If required, round the rate to the nearest dollar.
