Hercules Inc. manufactures elliptical exercise machines and treadmills. The products are produced in its Fabrication and Assembly production departments. In addition to production activities, several other activities are required to produce the two products. These activities and their associated activity rates are as follows:
Activity Activity Rate
Fabrication $31 per machine hour
Assembly $17 per direct labor hour
Setup $58 per setup
Inspecting $26 per inspection
Production scheduling $18 per production order
Purchasing $15 per purchase order
The activity-base usage quantities and units produced for each product were as follows:
Activity Base Elliptical Machines Treadmill
Machine hours 1,956 1,154
Direct labor hours 394 154
Setups 44 14
Inspections 700 420
Production orders 69 14
Purchase orders 195 119
Units produced 300 201
Required:
Use the activity rate and usage information to calculate the total activity cost and activity cost per unit for each product. Complete the Activity Tables for elliptical machines and treadmills. If required, round per-unit answers to the nearest cent.
Use the activity rate and usage information to calculate the total activity cost and activity cost per unit for elliptical machines product. Complete the Activity Table for elliptical machines. If required, round per-unit answers to the nearest cent.
Elliptical Machines
Activity Activity-
Base Activity Activity
Usage X Rate = Cost
Fabrication
Assembly
Setup
Inspecting
Production scheduling
Purchasing
Total activity cost
÷ Number of units ÷
Activity cost per unit
Use the activity rate and usage information to calculate the total activity cost and activity cost per unit for treadmill product. Complete the Activity Table for treadmills. If required, round per-unit answers to the nearest cent.
Treadmills
Activity Activity-
Base Activity Activity
Usage X Rate = Cost
Fabrication
Assembly
Setup
Inspecting
Production scheduling
Purchasing
Total activity cost
÷ Number of units ÷
Activity cost per unit
Answers: 3
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