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 $28 per machine hour
Assembly $20 per direct labor hour
Setup $75 per setup
Inspecting $30 per inspection
Production scheduling $12 per production order
Purchasing $8 per purchase order
The activity-base usage quantities and units produced for each product were as follows:
Elliptical
Activity Base Machines Treadmills
Machine hours 700 600
Direct labor hours 182 64
Setups 20 15
Inspections 10 16
Production orders 30 20
Purchase orders 56 75
Units produced 400 250
Required:
Use the activity rate and usage information to calculate the total activity cost and activity cost per unit for each product. Complete the Activity Tables for elliptical machines and treadmills. If required, round per-unit answers to the nearest cent.
Use the activity rate and usage information to calculate the total activity cost and activity cost per unit for elliptical machines product. Complete the Activity Table for elliptical machines. If required, round per-unit answers to the nearest cent.
Elliptical Machines
Activity Activity- Base Usage X Activity Rate = ActivityCost
Fabrication
Assembly
Setup
Inspecting
Production scheduling
Purchasing
Total activity cost
Number of units /
Activity cost per unit
Use the activity rate and usage information to calculate the total activity cost and activity cost per unit for treadmill product. Complete the Activity Table for treadmills. If required, round per-unit answers to the nearest cent.
Treadmills
Activity Activity- Base Usage X Activity Rate = ActivityCost
Fabrication
Assembly
Setup
Inspecting
Production scheduling
Purchasing
Total activity cost
Number of units /
Activity cost per unit

Answer 1

Elliptical machines

Activity Activity

Activity Usage Rate Cost

Fabrication 700 28 19600

Assembly 182 20 3640

Setup 20 75 1500

Inspecting 10 30 300

Product Scheduling 30 12 360

Purchasing 56 8 448

Total 25848

Activity cost per unit = Total Activity cost / Number of Units = $25,848 / 400

Activity cost per unit = $64.62

Treadmills

Activity Activity

Activity Usage Rate Cost

Fabrication 600 28 16800

Assembly 64 20 1280

Setup 15 75 1125

Inspecting 16 30 480

Product Schedulling 20 12 240

Purchasing 75 8 600

Total 20525

Activity cost per unit = Total Activity cost / Number of Units = $20525 / 250

Activity cost per unit = $82.1