2. Determine the unit product cost of each product according to the ABC system. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)

unit product cost of rims: ?

Unit product cost of posts: ?

• Requirement 2

Unit product cost of Rims	$ 37.00
Unit product cost of Posts	$ 15.72

• Workings

	Overhead cost	Activity	Activity rates
	[A]	[B]	[C = A/B]
Machine Setup	$21,600	180	$120.00	per setup
Special Processing	$180,000	4,000	$45.00	per MH
General factory	$288,000	24,000	$12.00	per DLHs

	Manufacturing Overhead cost:	Rims		Posts
	Machine Setup	$12,000	100 x $ 120	$9,600	80 x $ 120
	Special Processing	$180,000	4000 x $ 45	$0	0 x $ 45
	General factory	$96,000	8000 x $ 12	$192,000	16000 x $ 12
A	Total Overhead cost allocated	$288,000		$201,600
B	Total Units	20,000		80,000
C = A/B	Overhead cost per unit	$ 14.40		$ 2.52
D	Direct Material	$ 17.00		$ 10.00
E	Direct Labor Cost	$ 5.60	[0.4 hrs x $ 16]	$ 3.20	[0.2 hrs x $ 16]
F = C+D+E	Answer: Unit Cost	$ 37.00		$ 15.72