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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 Casting Assembly Inspecting Setup Materials handling Budgeted Activity Cost Activity Base $560,000 Machine hours 75,000 Direct labor hours 30,000 Number of inspections 18,750 Number of setups 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 2,000 Direct labor hours Number of inspections Number of setups 20,000 5,000 750 3,000 250 100 500 150 250 Number of loads 400 700 300 2,500 Units produced 5,000 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

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