Question
Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow:Direct Labor-Hours per unitAnnual Production Rims0.3029,000 units Posts0.2086,000 unitsAdditional information
Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow:Direct Labor-Hours per unitAnnual Production Rims0.3029,000 units Posts0.2086,000 unitsAdditional information about the company follows:Rims require $18 in direct materials per unit, and Posts require $14. The direct labor wage rate is $16 per hour. Rims are more complex to manufacture than Posts and they require special equipment. The ABC
system has the following activity cost pools:Estimated Activity Activity Cost PoolActivity MeasureEstimated Overhead CostRimsPostsTotal Machine setupsNumber of setups$42,140100100200 Special processingMachine-hours$131,5802,00002,0000
2. Determine the unit product cost of each product according to the ABC system.
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