Question

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. Dato regarding the two products follow Direct Labor-Hours Annual Production per unit 20,000 Rims 0,48 units 88,000 Posts 0.20 units Additional information about the company follows: nd Posts require $10 require rect materials per unit, 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: Estimated Activity Estimated Overhead Activity Cost Pool Machine setups Special processing Machine-hours General factory Activity Measure Number of setups Cost Rims Posts Total $ 21.600 100 80 180 $180,00e Direct labor-hours $288,eee 4,00e 8,000 4,000 16,000 24,e0e Exerclse 4-8 Part 1 Required: 1. Compute the activity rate for each activity cost pool. Activity Rate Activity Cost Pool Machine setups per setup Special processing General factory per MH per DLH

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Answer 1

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Let me know in case you face any issue: Answer to part b is in vertical format, put it according to the answer format:

Answers are highlighted in yellow: Solution: Activity Estimated Uses Rate |(Est cost/ uses) 1) Machine setups OH cost 180 $ 120 per setup 45 per MH 21600 Special Processing General Factory 4000 S 24000 $ 180000 12 Per DLH 288000 2) Particulars Rim Rims Post Posts $ 17.00 $ 10.00 Direct Material (16 0.40) (16 0.20) Direct labor Manufacturing overhead: Machine setups Special Processing General Factory Total Manufacturing overhead Unit produced Manufacturing overhead per unit Unit product cost 6.40 $ 3.20 (rate x uses) 12,000 $ 9,600 180000 0 96000 192000 288000 201600 20000 80000 14.40 S 2.52 14.40 $ 2.52 37.80 $ 15.72