Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow: Direct
Labor-Hours
per unit Annual
Production
Rims 0.60 19,000 units
Posts 0.50 78,000 units
Additional information about the company follows:
a. Rims require $16 in direct materials per unit, and Posts require $12.
b. The direct labor wage rate is $17 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 Activity Measure
Estimated
Overhead
Cost
Rims Posts Total
Machine setups
Number of setups $
27,300
110
190
300
Special processing
Machine-hours $
144,300
3,000
0
3,000
General factory
Direct labor-hours
$
570,000
Required:
1. Compute the activity rate for each activity cost pool. (Round your final answers to 2 decimal places.)
Activity Cost Pool
Activity Rate
Machine setups
per setup
Special processing
per MH
General factory
per DLH
2. Determine the unit product cost of each product according to the ABC system. (Do not round intermediate calculation. Round your final answers to 2 decimal places.)
Unit product cost of Rims
Unit product cost of Posts
Required:
3. Compute the activity rate for each activity cost pool. (Round your final answers to 2 decimal places.)
Activity Cost Pool
Activity Rate
Machine setups
per setup
Special processing
per MH
General factory
per DLH
4. Determine the unit product cost of each product according to the ABC system. (Do not round intermediate calculation. Round your final answers to 2 decimal places.)
Unit product cost of Rims
Unit product cost of Posts