Performance Products Corporation makes two products, titanium Rims and Posts. Da
ID: 2378651 • Letter: P
Question
Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow:
Direct
Labor-Hours Annual
per unit Production
Additional information about the company follows:
a. Rims require $24 in direct materials per unit, and Posts require $16.
b. The direct labor wage rate is $11 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
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 setup
General factory ?per setup
rev: 02-15-2011
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 $
Explanation / Answer
Activity rates:
Machine setups - $15525/135 = $115 per setup
Spl Processing - $72,000/3600 = $20 per machine hour
General factory - $206,800/18800 = $11 per direct labor hour
2. Unit product costs
Cost element ----- Rims ----- Posts
Direct Materials -- $24.00----- $16.00
Direct labor (11x0.50) 5.50 ----- 2.75
Overheads
Setup @115 ---- 1150 ------690
Proeceesing @20
General @11---- 121 -----121
Total costs $1,300.50 -- $829.75