Question

ercules 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	$34	per machine hour
Assembly	$34	per direct labor hour
Setup	$91	per setup
Inspecting	$20	per inspection
Production scheduling	$19	per production order
Purchasing	$10	per purchase order

The activity-base usage quantities and units produced for each product were as follows:

Activity Base	Elliptical Machines		Treadmill
Machine hours	650		400
Direct labor hours	189		217
Setups	21		21
Inspections	33		40
Production orders	60		50
Purchase orders	387		147
Units produced	510		330

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below.

Open spreadsheet

Use the activity rate and usage information to calculate the total activity cost and activity cost per unit for each product. If required, round the per unit answers to the nearest cent.

	Total Activity Cost	Activity Cost Per Unit
Elliptical Machines	$	$
Treadmill	$	$

Answer 1

	Total Activity Cost	Activity Cost Per Unit
Elliptical Machines	$36,107	$70.80
Treadmill	$26,109	$79.12

Activity	Activity Rate	Activity Base		Activity Cost Assigned
Fabrication	$ 34 per machine hour	650	Machine hours	$22,100
Assembly	$34 per direct labor hour	189	Direct labor hours	$6,426
Setup	$91 per setup	21	Setups	$1,911
Inspecting	$20 per inspection	33	Inspections	$660
Production scheduling	$19 per production order	60	Production orders	$1,140
Purchasing	$ 10 per purchase order	387	Purchase orders	$3,870
Tota Activity Cost assigned				$36,107
Total units produced				510
Tota Activity Cost assigned				$70.80
Treadmill
Activity	Activity Rate	Activity Base		Activity Cost Assigned
Fabrication	$ 34 per machine hour	400	Fabrication	$13,600
Assembly	$34 per direct labor hour	217	Assembly	$7,378
Setup	$91 per setup	21	Setup	$1,911
Inspecting	$20 per inspection	40	Inspecting	$800
Production scheduling	$19 per production order	50	Production scheduling	$950
Purchasing	$ 10 per purchase order	147	Purchasing	$1,470
Tota Activity Cost assigned				$26,109
Total units produced				330
Tota Activity Cost assigned				$79.12