Exercise $1$

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

$\backslash$table$[[,$Annual Production$],[$Rims$,20,000$ units$],[$Posts$,80,000$ units$]]$

Additional information about the company follows

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

The direct labor cost is $$6\mathrm{.}40$ per unit for rims, and $$3\mathrm{.}20$ per unit for posts.

The ABC system has the following activity cost pools:

$\backslash$table$[[$Activity Cost Pool $($and activity measure$),$Estimated,Activity,$],[,$Overhead Cost,Rims,Posts,Total$],[$Machine setups $($number of setups$),$$$21,600,100,80,180],[$Special processing $($machine$-$hours$),$$$180,000,4,000,0,4,000],[$General factory $($direct labor$-$hours$),$$$288,000,8,000,16,000,24,000]]$

Required:

a$)$ Compute the activity rate for each activity cost pool.

b$)$ Compute the manufacturing overhead cost per unit for Posts.

c$)$ Determine the unit product cost of Posts according to the ABC system.