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 18,000 units Posts 0.20 79,000 units Additional information about the company follows:
a. Rims require $16 in direct materials per unit, and Posts require $11.
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 $ 23,000 95 93 188 Special processing Machine-hours $ 170,000 3,700 0 3,700 General factory Direct labor-hours $ 283,000 7,200 15,800 23,000 rev: 02-15-2011, 02_09_2013_QC_26287 1. value: 4.00 points
Required:
1. Compute the activity rate for each activity cost pool. Activity Cost Pool Activity Rate Machine setups $ per setup Special processing $ per MH General factory $ per DLH 2. value: 4.00 points
2. Determine the unit product cost of each product according to the ABC system.Unit product cost of Rims $ Unit product cost of Posts $