Exercise 3-8 Computing ABC Product Costs [LO3-2, LO3-3]

[The following information applies to the questions displayed below.]

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

	Direct Labor-Hours per unit	Annual Production
Rims	0.70	26,000 units
Posts	0.80	90,000 units

Additional information about the company follows:

a. Rims require $14 in direct materials per unit, and Posts require $10.

b. The direct labor wage rate is $20 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:

		Estimated Activity
Activity Cost Pool	Activity Measure	Estimated Overhead Cost		Rims	Posts	Total
Machine setups	Number of setups	$	33,300	70	230	300
Special processing	Machine-hours	$	172,800	3,000	0	3,000
General factory	Direct labor-hours	$	858,000	5,000	73,000	78,000

Exercise 3-8 Part 1

Required:
1.	Compute the activity rate for each activity cost pool. (Round your final answers to 2 decimal places.)

Activity Cost Pool	Activity Rate
Machine setups		per setup
Special processing		per MH
General factory		per DLH

Exercise 3-8 Part 2

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

Unit product cost of Rims
Unit product cost of Posts