Hercules 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 $31 per machine hour Assembly $17 per direct labor hour Setup $58 per setup Inspecting $29 per inspection Production scheduling $18 per production order Purchasing $15 per purchase order The activity-base usage quantities and units produced for each product were as follows: Activity Base Elliptical Machines Treadmill Machine hours 1,741 1,027 Direct labor hours 440 172 Setups 54 17 Inspections 719 431 Production orders 69 14 Purchase orders 200 122 Units produced 278 186 Use the activity rate and usage information to determine the total activity cost and activity cost per unit for each product. If required, round the per unit answers to the nearest cent. Total Activity Cost Activity Cost Per Unit Elliptical Machines $fill in the blank 1 $fill in the blank 2 Treadmill $fill in the blank 3 $fill in the blank 4

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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Question

Hercules 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	$31	per machine hour
Assembly	$17	per direct labor hour
Setup	$58	per setup
Inspecting	$29	per inspection
Production scheduling	$18	per production order
Purchasing	$15	per purchase order

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

Activity Base	Elliptical Machines	Treadmill
Machine hours	1,741		1,027
Direct labor hours	440		172
Setups	54		17
Inspections	719		431
Production orders	69		14
Purchase orders	200		122
Units produced	278		186

Use the activity rate and usage information to determine the total activity cost and activity cost per unit for each product. If required, round the per unit answers to the nearest cent.

	Total Activity Cost	Activity Cost Per Unit
Elliptical Machines	$fill in the blank 1	$fill in the blank 2
Treadmill	$fill in the blank 3	$fill in the blank 4

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