Performance Products Corporation makes two products, titanium Rims and Posts. Da

Question

Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow: Additional Information about the company follows: Rims require $13 in direct materials per unit and Posts require $9. The direct labor wage rate is $15 per hour. Rims are more complex to manufacture than Posts and they require special equipment. The ABC system has the following activity cost pools: Required: Compute the activity rate for each activity cost pool. (Round your final answer to 2 decimal places.) 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

1. Activity rates: Cost Activity units cost per activity Machine setups      39,560                  200 197.8 Spl Processing    140,180               2,000 70.09 General factory    532,000             38,000 14 2. Unit product costs Cost element Rim Post Direct Materials        13.00                 9.00 Direct labor (15x.80) (15*.60)        12.00                 9.00 Overheads Setup (197.8*80)/19000,(197.8*120)/86000           0.83                 0.28 Proeceesing (140180/19000)           7.38 General (14*3000)/19000) (14*35000)/86000)           2.21                 5.70 Total costs        35.42               23.97

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