Final answer:
The activity rate per product using activity-based costing is calculated by allocating the total heating cost based on the space each product occupies. Product A with 500 square feet incurs a cost of $15,000, while Product B with 200 square feet incurs a cost of $6,000.
Step-by-step explanation:
To calculate the activity rate per product using activity-based costing in this scenario, we need to consider how much each product contributes to the overall space and thus the heating costs. The total space occupied by both products is 500 + 200 = 700 square feet.
The cost of heating the building ($21,000) will be allocated to products A and B based on the space they occupy. So, the cost rate per square foot is $21,000 / 700 square feet = $30 per square foot.
Therefore, the activity rate for Product A, which takes up 500 square feet, would be $30 * 500 square feet = $15,000. Similarly, for Product B, which takes up 200 square feet, the activity rate would be $30 * 200 square feet = $6,000.