Life Cycle Inc. manufactures stationary bicycles and rowing machines. 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 |
$26 per machine hour |
|
Assembly |
$15 per direct labor hour |
|
Setup |
$38 per setup |
|
Inspecting |
$25 per inspection |
|
Production scheduling |
$12 per production order |
|
Purchasing |
$ 5 per purchase order |
The activity base usage quantities and units produced for each product were as follows:
|
|
Stationary Bicycle |
Rowing Machine |
|
Machine hours |
1,950 |
975 |
|
Direct labor hours |
436 |
162 |
|
Setups |
48 |
15 |
|
Inspections |
725 |
375 |
|
Production orders |
68 |
20 |
|
Purchase orders |
165 |
125 |
|
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.