Question

Atlas Enterprises 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 $27 per machine hour Assembly $9 per direct labor hour Setup $45 per setup Inspecting $23 per inspection Production scheduling $10 per production order Purchasing $7 per purchase order The activity-base usage quantities and units produced for each product were as follows: Activity Base Elliptical Machines Treadmill Machine hours 1,834 1,082 Direct labor hours 424 165 Setups 44 14 Inspections 720 432 Production orders 67 13 Purchase orders 170 104 Units produced 291 195 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

	Ellptical machine		Tread mill
Activity	total activity cost	activity cost per unit	Total activity cost	Activity cost per unit
Fabricaton	($27 per machine hour * 1,834 hours)=>$49,518	$49,518 / 291 =>$170.16	($27 * 1,082)=>$29,214	$29,214/195=>149.82
assembly	($9 per labour hour * 424 labour hours)=$3816	$3816/291=>$13.11	($9*165)=>$1485	$1485/195 =>$7.62
setup	($45 per setup *44 setups)=>$1,980	$1980/291=>$6.80	($45*14)=>$630	$630/195=>$3.23
inspections	($23 * 720)=>$16,560	$16,560/291 =>$56.91	($23*432)=>$9936	$9936/195=>$50.95
production schedulling	($10 per production order)*67 production orders=>$670	($670 / 291)=>$2.30	($10*13)=>$130	$130/195=>0.67
purchasing	($7 per purchase order *170 purchase orders)=>$1,190	$1.190 / 291 =>$4.09	($7 per purchase order * 104 orders)=>$728	$728 / 195 =>$3.73
total cost per unit		$253.37		$216.02