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Required information Exercise 4-8 (Algo) Computing ABC Product Costs [LO4-2, LO4-3] [The following information applies to the questions displayed below] Performance Products Corporation makes
Required information Exercise 4-8 (Algo) 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: Rims Posts Direct Labor- Hours per unit 0.70 0.70 Annual Production 26,000 units 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 $18 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 Estimated Overhead Cost Rims Posts Total $ 42,300 Machine-hours $ 162,000 120 4,000 80 200 0 4,000 Direct labor-hours $ 936,000 18,2001 63,000 81,200
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