HealthTec Equipment Company manufactures stationary bicycles and treadmills. The products are produced in the 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 $32 per machine hour (mh) Assembly $16 per direct labor hour (dlh) Setup $50 per setup Inspecting $29 per inspection Production scheduling $19 per production order Purchasing $6 per purchase order The activity-base usage quantities and units produced for each product were as follows: Stationary Bicycle Treadmill Machine hours 1,870 950 Direct labor hours 460 170 Setups 30 10 Inspections 660 340 Production orders 40 50 Purchase orders 160 140 Units produced 1,000 1,000 Use the activity rate and usage information to compute the total activity costs and the activity costs per unit for each product. If required, round your answers to two decimal places. Activity Stationary Bicycle Activity Cost Treadmill Activity Cost Fabrication $fill in the blank 1 $fill in the blank 2 Assembly fill in the blank 3 fill in the blank 4 Setup fill in the blank 5 fill in the blank 6 Inspecting fill in the blank 7 fill in the blank 8 Production scheduling fill in the blank 9 fill in the blank 10 Purchasing fill in the blank 11 fill in the blank 12 Total $fill in the blank 13 $fill in the blank 14 Number of units fill in the blank 15 fill in the blank 16 Activity cost per unit $fill in the blank 17 $fill in the blank 18

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 10E: Hercules Inc. manufactures elliptical exercise machines and treadmills. The products are produced in...

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Activity-Based Costing

HealthTec Equipment Company manufactures stationary bicycles and treadmills. The products are produced in the 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	$32 per machine hour (mh)
Assembly	$16 per direct labor hour (dlh)
Setup	$50 per setup
Inspecting	$29 per inspection
Production scheduling	$19 per production order
Purchasing	$6 per purchase order

The activity-base usage quantities and units produced for each product were as follows:

	Stationary Bicycle	Treadmill
Machine hours	1,870		950
Direct labor hours	460		170
Setups	30		10
Inspections	660		340
Production orders	40		50
Purchase orders	160		140
Units produced	1,000		1,000

Use the activity rate and usage information to compute the total activity costs and the activity costs per unit for each product. If required, round your answers to two decimal places.

Activity	Stationary Bicycle Activity Cost	Treadmill Activity Cost
Fabrication	$fill in the blank 1		$fill in the blank 2
Assembly	fill in the blank 3		fill in the blank 4
Setup	fill in the blank 5		fill in the blank 6
Inspecting	fill in the blank 7		fill in the blank 8
Production scheduling	fill in the blank 9		fill in the blank 10
Purchasing	fill in the blank 11		fill in the blank 12
Total	$fill in the blank 13		$fill in the blank 14
Number of units	fill in the blank 15		fill in the blank 16
Activity cost per unit	$fill in the blank 17		$fill in the blank 18

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