Performance products corporation makes two products

Reference no: EM13577123

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	22,000 units
Posts	0.20	84,000 units

Additional information about the company follows:

a. Rims require $17 in direct materials per unit, and Posts require $10.

b. The direct labor wage rate is $17 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

Activity Cost Pool	Activity Measure	Estimated Overhead Cost		Rims	Posts	Total
Machine setups	Number of setups	$	22,000	99	85	184
Special processing	Machine-hours	$	190,000	4,500	0	4,500
General factory	Direct labor-hours	$	269,000	8,800	16,800	25,600

1.Compute the activity rate for each activity cost pool.

Activity Cost Pool	Activity Rate
Machine setups	$	per setup
Special processing	$	per MH
General factory	$	per DLH

2.Determine the unit product cost of each product according to the ABC system.


Unit product cost of Rims	$
Unit product cost of Posts	$

Reference no: EM13577123

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