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	$344,760		Machine hours
Assembly	231,200		Direct labor hours
Inspecting	38,080		Number of inspections
Setup	33,360		Number of setups
Materials handling	43,680		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	5,370		4,770		10,140
Direct labor hours	4,620		6,940		11,560
Number of inspections	1,700		540		2,240
Number of setups	190		50		240
Number of loads	720		190		910
Units produced	10,600		5,300		15,900

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

Activity	Activity Rate
Casting	$	per machine hour
Assembly	$	per direct labor hour
Inspecting	$	per inspection
Setup	$	per setup
Materials handling	$	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	$	$
Dining Room Lighting Fixtures	$	$

Answer 1

division is done in the ratio of quantities of usage of different in diff activities