Atlas Enterprises Inc. manufactures elliptical exercise machines and treadmills.
ID: 2337902 • Letter: A
Question
Atlas Enterprises 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:
The activity-base usage quantities and units produced for each product were as follows:
Use the activity rate and usage information to calculate the total activity cost and activity cost per unit for each product. If required, round the per unit answers to the nearest cent.
Activity Activity Rate Fabrication $27 per machine hour Assembly $9 per direct labor hour Setup $51 per setup Inspecting $31 per inspection Production scheduling $10 per production order Purchasing $7 per purchase orderExplanation / Answer
Answers
Elliptical Machines
Treadmill
Activity
Activity Rate
No. of cost drivers
Activity Cost
No. of cost drivers
Activity Cost
Fabrication
$ 27.00
per machine hour
1,924
$ 51,948.00
1,135
$ 30,645.00
Assembly
$ 9.00
per direct labor hour
447
$ 4,023.00
174
$ 1,566.00
Setup
$ 51.00
per setup
59
$ 3,009.00
18
$ 918.00
Inspecting
$ 31.00
per inspection
676
$ 20,956.00
406
$ 12,586.00
Production scheduling
$ 10.00
per production order
77
$ 770.00
15
$ 150.00
Purchasing
$ 7.00
per purchase order
173
$ 1,211.00
106
$ 742.00
TOTAL
$ 81,917.00
TOTAL
$ 46,607.00
Units
248
Units
166
Activity Cost per unit
$ 330.31
$ 280.77
Total Activity Cost
Activity Cost Per Unit
Elliptical Machines
$ 81,917.00
$ 330.31
Treadmill
$ 46,607.00
$ 280.77
Elliptical Machines
Treadmill
Activity
Activity Rate
No. of cost drivers
Activity Cost
No. of cost drivers
Activity Cost
Fabrication
$ 27.00
per machine hour
1,924
$ 51,948.00
1,135
$ 30,645.00
Assembly
$ 9.00
per direct labor hour
447
$ 4,023.00
174
$ 1,566.00
Setup
$ 51.00
per setup
59
$ 3,009.00
18
$ 918.00
Inspecting
$ 31.00
per inspection
676
$ 20,956.00
406
$ 12,586.00
Production scheduling
$ 10.00
per production order
77
$ 770.00
15
$ 150.00
Purchasing
$ 7.00
per purchase order
173
$ 1,211.00
106
$ 742.00
TOTAL
$ 81,917.00
TOTAL
$ 46,607.00
Units
248
Units
166
Activity Cost per unit
$ 330.31
$ 280.77
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