Cornerstone Exercise 4.5 (Algorithmic) Activity-Based Product Costing Roberts Company produces two weed eaters: basic and advanced.The company has four activities: machining, engineering, receiving,and inspection. Information on these activities and their driversis given below. | | Basic | | Advanced | | Total | | Units produced | | 130,000 | | 390,000 | | ------ | | Prime costs | | $9,360,000 | | $39,780,000 | | $49,140,000 | | Machine hours | | 130,000 | | 650,000 | | 780,000 | | Engineering hours | | 400 | | 3,600 | | 4,000 | | Receiving orders | | 400 | | 1,200 | | 1,600 | | Inspection hours | | 900 | | 1,800 | | 2,700 | | | | Overhead costs: | | | Machining | | $7,800,000 | | Engineering | | 1,680,000 | | Receiving | | 512,000 | | Inspecting products | | 351,000 |
Required: 1. Calculate the four activity rates. | Machining rate | $ per machine hour | | Engineering rate | $ per hour | | Receiving rate | $ per order | | Inspecting rate | $ per hour |
2. Calculate the unit costs using activityrates. Round your answers to the nearest cent. | Unit cost | | | Basic | $ per unit | | Advanced | $ per unit |
Calculate the overhead cost per unit. Round your answers to thenearest cent. | Overhead Cost | | | Basic | $ per unit | | Advanced | $ per unit |
3. What if consumption ratios instead ofactivity rates were used to assigned costs? Show the costassignment for the inspection activity. | Cost assignment | | | Basic | $ | | Advanced | $ |
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