Duquesne Incorporated Recently Implemented an Activity-Based Costing System

Essay

Duquesne Incorporated recently implemented an activity-based costing system. Total results from all products manufactured in the current year are:
Activity cost pool Total cost Total activity
Assembly $7,500 1,500 machine-hours
Packaging $3,150 450 number of orders
Quality control inspections $900 200 number of inspections
Duquesne manufactures sprinkler heads for commercial applications. Annual production and sales of one of its heads, is 2,300. The following relates the the most recent year.
Annual machine hours 1,000
Annual number of orders 125
Annual number of inspections 400
Direct materials cost per unit $15.00
Direct labor cost per unit $5.00
Required:
1. Calculate the activity cost pool rates for each of the three activity cost pools listed.
2. Calculate the average cost of one Sizzler.