Compute the activity cost rates for materials handling, assembly, and design based on these data:
- Materials
- Cloth 26,000
- Fasteners 4,000
- Purchased parts 40,000
- Materials handling
- Labor 8,000
- Equipment depreciation 5,000
- Electrical power 2,000
- Maintenance 6,000
- Assembly
- Design
- Labor 5,000
- Electrical power 1,000
- Overhead 8,000
Output totaled 40,000 units. Each unit requires three machine hours of effort. Materials handling costs are allocated to the products based on direct materials cost. Design costs are allocated based on units produced. Assembly costs are allocated based on 500 machine operator hours. (Hint: activity cost rate = total activity costs/total allocation base. Examples of an allocation base include total dollars of materials, total machine operator hours, or total units of output).