Question

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:

Activity	Budgeted Activity Cost		Activity Base
Casting	$258,250		Machine hours
Assembly	212,040		Direct labor hours
Inspecting	27,600		Number of inspections
Setup	39,780		Number of setups
Materials handling	47,960		Number of loads

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	5,470		4,860		10,330
Direct labor hours	4,710		7,070		11,780
Number of inspections	1,400		440		1,840
Number of setups	210		50		260
Number of loads	860		230		1,090
Units produced	10,800		5,400		16,200

a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar.

Activity	Activity Rate
Casting	$fill in the blank 1	per machine hour
Assembly	$fill in the blank 2	per direct labor hour
Inspecting	$fill in the blank 3	per inspection
Setup	$fill in the blank 4	per setup
Materials handling	$fill in the blank 5	per load

b. Use the activity rates in (a) to determine the total and per-unit activity costs associated with each product. Round the per unit amounts to the nearest cent.

Product	Total Activity Cost	Activity Cost Per Unit
Entry Lighting Fixtures	$fill in the blank 6	$fill in the blank 7
Dining Room Lighting Fixtures	$fill in the blank 8	$fill in the blank 9

Answer 1

1.