Question

High-Calibre Products Corporation makes two products: titanium rims and posts. Data regarding the two products follow:

	Direct Labour- Hours per Unit	Annual Production
Rims	0.50	37,000	units
Posts	0.25	165,000	units

Additional information about the company follows:

1. Rims require $16 in direct materials per unit, and posts require $9.
2. The direct labour wage rate is $12 per hour.
3. Rims are more complex to manufacture than posts, and they require special equipment.
4. The ABC system has the following activity cost pools:

		Estimated Overhead Cost	Activity
Activity Cost Pool	Activity Measure		Rims	Posts	Total
Machine setups	Number of setups	$39,550	185	165	350
Special processing	Machine-hours	$281,200	7,400	0	7,400
General factory	Direct labour-hours	$657,250	18,500	41,250	59,750

2. Determine the unit cost of each product according to the ABC system, including direct materials and direct labour. (Round your intermediate calculations and final answers to 2 decimal places.)

rims unit cost

posts unit cost

Answer 1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and calculation. For detailed answer refer to the supporting sheet.

Activity For Post {E} Overhead cost For Post (C*E) Answer Calculation of Overhead Rate Per Unit For Each Product Rate Per Estimated Cost Overhead Cost activity (B) Activity(c) activity for (D) (A) for Rim (CD) (A/B) 39550 350 113 185 20905 281200 7400 38.00 7400 281200 657250 59750 11 18500 203500 505605 37000 13.67 165 18645 activity Cost Pool Machine Set Ups Special Processing General Factory Total No. of Units - Overhead cost Per Unit 0 41250 453750 472395 165000 2.86 Post Calculation of Unit Product Cost Rim 3 Direct Material 169 - Direct Labour 5 Manufacturing Overheads 5 Total Cost Per Unit 35.67 2.86 14.86 3 Thus the final answer is Rim 35.67 Post 14.86 U Unit Product of Each Product