Computing ABC Product Costs [LO3, LO4]

Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow:

Additional information about the company follows:

a. Rims require $17 in direct materials per unit, and Posts require $10.

b. The direct labor wage rate is $16 per hour.

c. Rims are more complex to manufacture than Posts, and they require special equipment.

d. The ABC system has the following activity cost pools:

Required:
1. Compute the activity rate for each activity cost pool.
2. Determine the unit cost of each product according to the ABC system, including direct materials a nd di rect l abor.

Transcribed Image Text:

Rims.. Posts.. Direct Labor-Hours per Unit Annual Production 0.40 20,000 units 0.20 80,000 units