Managerial Accounting: E7-12 Performance Products Corporation makes two products

Managerial Accounting 
E7-12 Computing ABC Product Costs 
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 19,000 units    
Posts 0.20 85,000 units    

Additional information about the company follows: 
a. Rims require $14 in direct materials per unit, and Posts require $11. 
b. The direct labor wage rate is $16 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: 
Activity 
  Activity Cost Pool   Activity Measure Estimated Overhead Cost Rims Posts Total
  Machine setups   Number of setups $22,000 90 73 163 
  Special processing   Machine-hours $170,000 4,400 - 4,400 
  General factory   Direct labor-hours $284,000 7,600 17,000 24,600 

Required: 
1. Compute the activity rate for each activity cost pool. (Round your final answers to 2 decimal places.) 
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.)
Powered by