Activity Rates and Activity-Based Product Costing Hammer Company produces a vari

Question

Activity Rates and Activity-Based Product Costing

Hammer Company produces a variety of electronic equipment. One of its plants produces two laser printers: the deluxe and the regular. At the beginning of the year, the following data were prepared for this plant:

$483

In addition, the following information was provided so that overhead costs could be assigned to each product:

1. Calculate the overhead rates for each activity. If required, carry your answers out to the nearest cent.

2. Calculate the per-unit product cost for each product. Round your answers to the nearest whole dollar.

Deluxe Regular Quantity 100,000 800,000 Selling price $900 $750 Unit prime cost $529

$483

Explanation / Answer

overhead rates

unit cost

setups 2,500,000/500 $5000 per set up Machining 71,000,000/400,000 $177.5 Engineering 5,600,000/150,000 $37.33 packing order 200,000/500,000 $0.4

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