Activity Rates and Activity-Based Product Costing Hammer Company produces a variety of electronic equipment. One of its plants produces two laser printers: the deluxe and the regular. At the beginning of the year, the following data were prepared for this plant:
Deluxe Regular
Quantity 100,000 800,000
Selling price $900 $750
Unit prime cost $529 $483
In addition, the following information was provided so that overhead costs could be assigned to each product:
Activity Name Activity Driver Activity Cost Deluxe Regular
Setups Number of setups 300 200 $2,000,000
Machining Machine hours 100,000 300,000 80,000,000
Engineering Engineering hours 50,000 100,000 6,000,000
Packing Packing orders 100,000 400,000 100,000
Required:
1. Calculate the overhead rates for each activity. If required, carry your answers out to the nearest cent.
2. Calculate the per-unit product cost for each product. Round your answers to the nearest whole dollar.