Question

Check my work Required information Exercise 4-8 Computing ABC Product Costs [LO4-2, LO4-3] [The following information applies to the questions displayed below.) Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow: Direct Labor-Hours per unit 0.30 0.50 Annual Production 26,000 units 70,000 units Rims Posts Additional information about the company follows: a. Rims require $15 in direct materials per unit, and Posts require $11. b. The direct labor wage rate is $15 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 Rims Activity Cost Pool Machine setups Special processing General factory Posts 140 Estimated Overhead Cost $ 32,900 $ 114,800 $1,404,000 Activity Measure Number of setups Machine-hours Direct labor-hours 60 4,000 6,000 Total 200 4,000 78,000 72,000 < Prey 5 of 6 Next >

Answer 1

$ $ Rims Activity Cost Pool Machin Setup Special Processing General facotry Total Ovehead Cost Assigned Machine Setup (Rate * setups) Special Processing (Rate* Machine Hours) General Factory Total Oveheads Ovehead cost per unit (Ov/ Units) Activity Rate 165 Per Setup 29 Per MH 18 Per MH Posts 9870 23030 114800 108000 1296000 232670 1319030 8.95 18.84 Determine the Unit Product Cost Rims Direct Material The Direct labor Overhead cost Unit Cost Posts 15.00 11.00 4.50 7.50 8.95 18.84 28.45 37.34