Performance Products Corporation makes two products, Titanium Rims and Posts. Data regarding the two products...
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Accounting
Performance Products Corporation makes two products, Titanium Rims and Posts. Data regarding the two products is provided in the following table:
Direct Labor Hours per Unit
Annual Production
Rims
0.40
20,000 units
Posts
0.20
80,000 units
Additional information about the company follows:
Rims require $17.00 in direct materials per unit, and Posts require $10.00.
The direct labor wage rate is $16.00 per hour.
Rims are more complex to manufacture than Posts, and they require special equipment.
The Activity Based Costing (ABC) System has the following activity cost pools:
Activity Cost Pool
Activity Measure
Estimated Overhead Cost
Rims
Posts
TotalActivity for Rims and Posts
Machine Setups
Number of Machine Setups
$21,600
100
80
180
Special Processing
Machine Hours
$180,000
4,000
0
4,000
General Factory
Direct Labor Hours
$288,000
8,000
16,000
24,000
Determine the unit product cost of each product (Rims and Posts) according to the ABC system - Please show your work so I can better understand the answer :)
Rims
Posts
Direct materials:
Direct labor:
Manufacturing Overhead:
Unit cost
Answer & Explanation
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