Performance products corporation makes two products, titanium rims and posts. data regarding the two products follow: direct labor-hours per unit annual production rims 0.40 20,000 units posts 0.20 80,000 units additional information about the company follows: rims require $17 in direct materials per unit, and posts require $10. 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 pool activity measure estimated overhead cost rims posts total machine setups number of setups $ 21,600 100 80 180 special processing machine-hours $ 180,000 4,000 0 4,000 general factory direct labor-hours $ 288,000 8,000 16,000 24,000 required: 1. compute the activity rate for each activity cost pool.

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Exercise 18-15 sheffield appliance center is an experienced home appliance dealer. sheffield appliance center also offers a number of services for the home appliances that it sells. assume that sheffield appliance center sells ovens on a standalone basis. sheffield appliance center also sells installation services and maintenance services for ovens. however, sheffield appliance center does not offer installation or maintenance services to customers who buy ovens from other vendors. pricing for ovens is as follows. oven only $790 oven with installation service 850 oven with maintenance services 970 oven with installation and maintenance services 990 in each instance in which maintenance services are provided, the maintenance service is separately priced within the arrangement at $180. additionally, the incremental amount charged by sheffield appliance center for installation approximates the amount charged by independent third parties. ovens are sold subject to a general right of return. if a customer purchases an oven with installation and/or maintenance services, in the event sheffield appliance center does not complete the service satisfactorily, the customer is only entitled to a refund of the portion of the fee that exceeds $790. assume that a customer purchases an oven with both installation and maintenance services for $990. (b) indicate the amount of revenue that should be allocated to the oven, the installation, and to the maintenance contract.

Performance bicycle company makes steel and titanium handle bars for bicycles. it requires approximately 1 hour of labor to make one handle bar of either type. during the most recent accounting period, barr company made 7,700 steel bars and 2,300 titanium bars. setup costs amounted to $35,000. one batch of each type of bar was run each month. if a single company-wide overhead rate based on direct labor hours is used to allocate overhead costs to the two products, the amount of setup cost assigned to the steel bars will be: