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Exercise 4-8 Computing ABC Product Costs [LO4-2, LO4-3] [The following information applies to the questions displayed below.] Performance Products Corporation makes two products, titanium Rims
Exercise 4-8 Computing ABC Product Costs [LO4-2, LO4-3] [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 Annual per unit 0.50 Production Rims 25,000 units 88,000 units Posts 0.80 Additional information about the company follows: a. Rims require $19 in direct materials per unit, and Posts require $17 b. The direct labor wage rate is $15 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 Estimated Overhead Activity Cost Pool Machine setups Special processing General factory Activity Measure Number of setups Rims Cost Posts 430 Total 26,400 $ 163,680 $ 500,000 70 500 Machine-hours 4,000 3,000 4,000 50,000 Direct labor-hours 47,000 Exercise 4-8 Part 1 Required: 1. Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.) Activity Cost Pool Activity Rate per setup Machine setups Special processing per MH General factory per DLH
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