Atlas Enterprises Inc. manufactures elliptical exercise machines and treadmills.
ID: 2430119 • 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 $22 per machine hour Assembly $17 per direct labor hour Setup $53 per setup Inspecting $31 per inspection Production scheduling $18 per production order Purchasing $15 per purchase orderExplanation / Answer
Activity Activity Rate Fabrication 22.00 per machine hour Activity Base Elliptical Machines Treadmill Assembly 17.00 per direct labor hour Machine hours 1,957 1,155 Setup 53.00 per setup Direct labor hours 386 151 Inspecting 31.00 per inspection Setups 46 14 Production scheduling 18.00 per production order Inspections 603 362 Purchasing 15.00 per purchase order Production orders 73 15 Purchase orders 189 115 Allocation of Overheads to Products: Elliptical Machines Treadmill Fabrication 43054 25410 (Activity Used * Activity Rate) Assembly 6562 2567 Setup 2438 742 Inspecting 18693 11222 Production scheduling 1314 270 Purchasing 2835 1725 Total Activity Cost 74896 41936 Units produced 259 174 Activity Cost PU 289.2 241.0
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