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Exercise 4-8 (Static) Computing ABC Product Costs [LO4-2, LO4-3] [The following information applies to the questions displayed below.] Performance Products Corporation makes two products, titanium
Exercise 4-8 (Static) 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: Annual Production 20,000 units 80,000 units 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. Rims Posts Direct Labor- Hours per unit 0.40 0.20 c. Rims are more complex to manufacture than Posts and they require special equipment. d. The ABC system has the following activity cost pools: Activity Cost Pool Machine setups Special processing General factory Exercise 4-8 (Static) Part 2 Unit product cost of Rims Unit product cost of Posts Activity Measure Number of setups Machine-hours Direct labor-hours Estimated Overhead Cost $ 21,600 $ 180,000 $ 288,000 Estimated Activity Rims 100 4,000 8,000 Posts 80 0 16,000 Total 180 4,000 24,000 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.)
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