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Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products Direct Labor-Hours per unit 0.40 0.20 Annual Production 20,000 units
Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products Direct Labor-Hours per unit 0.40 0.20 Annual Production 20,000 units 80,000 units Rins Posts 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. 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 Machine setups Special processing General factory Activity Measure Number of setups Machine-hours Direct labor-hours Estimated Overhead Cost $ 21,600 $180,000 $1288,000 Rims 100 4,000 8,000 Posts 80 0 16,000 Total 180 4,000 24,000 Required: 1. Compute the activity rate for each activity cost pool. Activity Cost Pool Machine setups Special processing General factory Activity Rate per setup per MH per DLH Rims Posts 0.40 0.20 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. 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 es Activity Cost Pool Machine setups Special processing General factory Posts 80 Estimated Overhead Cost $ 21,600 $ 180,000 $ 288,000 Activity Measure Number of setups Machine-hours Direct labor-hours Rims 100 4,000 8,000 Total 180 4,000 24,000 16,000 2. Determine the unit product cost of each product according to the ABC system. (Do not round interme your final answers to 2 decimal places.) Unit product cost of Rims Unit product cost of Posts G Prev of 10 Next >
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