Question

Amazon Korie Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow:

   

	Direct Labor-Hours per unit	Annual Production
Rims	0.80	29,000 units
Posts	0.80	73,000 units

Additional information about the company follows:

1. Rims require $20 in direct materials per unit, and Posts require $18.
2. The direct labor wage rate is $16 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 Activity
Activity Cost Pool	Activity Measure	Estimated Overhead Cost		Rims	Posts	Total
Machine setups	Number of setups	$	34,310	100	100	200
Special processing	Machine-hours	$	113,150	1,000	0	1,000
General factory	Direct labor-hours	$	1,218,000	4,000	83,000	87,000

Determine the unit product cost of each product according to the ABC system. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)

unit product cost of Rims _______

unit product cost of Rims _______

Answer 1

100 0 83000 200 1000 87000 Machine Setup Special Processing General Factory Activity Cost Pool Machin Setup (34310/200) $ Special Processing (113150/1000) $ General facotry (1218000/87000) $ Total Ovehead Cost Assigned Rims Machine Setup (Rate * setups) Special Processing (Rate* Machine Hours) General Factory Total Oveheads Ovehead cost per unit (OV/ Units) 34310 100 113150 1000 1218000 4000 Activity Rate 171.55 Per Setup 113.15 Per MH 14.00 Per MH Posts 17155 17155 113150 56000 1162000 186305 1179155 6.42 16.15 11 Posts Determine the Unit Product Cost Rims Direct Material 20.00 The Direct labor ( 16*0.80) 12.80 Overhead cost 6.42 Unit Cost 39.22 18.00 12.80 16.15 46.95 Unit Product cost of Rims 39.22