Question

# BriteLite Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the...

BriteLite Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated activity costs and activity bases are as follows:

 Activity Activity Costs (Budgeted) Activity Base Casting \$42,000 Machine hours Assembly 13,500 Direct labor hours Inspecting 5,800 Number of inspections Setup 16,800 Number of setups Materials handling 3,600 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 for each product and in total are provided in the following table:

 Activity Base Entry Dining Total Machine hours 800 600 1400 Direct labor hours 500 400 900 Number of inspections 140 150 290 Number of setups 80 60 140 Number of loads 50 40 90 Units produced 1,200 500 1,700

a. Determine the activity rate for each activity.

 Activity Activity Rate Casting \$ mh Assembly \$ dlh Inspecting \$ /insp. Setup \$ /setup Materials handling \$ /load

b. Use the activity rates in (a) to determine the total and per-unit activity costs associated with each product. If required, round your answers to two decimal places.

 Entry Lighting Fixtures Dining Room Lighting Fixtures Casting \$ \$ Assembly Inspecting Setup Materials handling Total activity cost \$ \$ Number of units Activity cost per unit \$ \$

 a Activity Activity Rate Casting 30 =42000/1400 Assembly 15 =13500/900 Inspecting 20 =5800/290 Setup 120 =16800/140 Materials handling 40 =3600/90 b Entry Lighting Fixtures Dining Room Lighting Fixtures Casting 24000 18000 Assembly 7500 6000 Inspecting 2800 3000 Setup 9600 7200 Materials handling 2000 1600 Total activity cost 45900 35800 Number of units 1200 500 Activity cost per unit 38.25 71.60 Workings: Entry Lighting Fixtures Dining Room Lighting Fixtures Casting =800*30 =600*30 Assembly =500*15 =400*15 Inspecting =140*20 =150*20 Setup =80*120 =60*120 Materials handling =50*40 =40*40

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