Business, 28.07.2020 19:01 jholland03

Activity Rates and Product Costs using Activity-Based Costing Lonsdale 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:
Budgeted
Activity Activity Cost Activity Base
Casting $570,000
Assembly 80,000
Inspecting 42,000
Setup 38,000
Materials handling 23,750
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 6,000 13,000 19,000
Direct labor hours 3,000 2,000 5,000
Number of inspections 600 400 1,000
Number of setups 300 200 500
Number of loads 450 500 950
Units Produced 6,000 3,000 9,000
A. Determine the activity rate for each activity.
B. Use the activity rates in (a) to determine the total and per-unit activity costs associated with each product.
Product Total Activity Cost Activity Cost Per Unit
Entry Lighting Fixtures $265,420 $27
Dining Room Lighting Fixtures $ 238,900 $48

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Activity Rates and Product Costs using Activity-Based Costing Lonsdale Inc. manufactures entry and...

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