ABC and unit cost

Anonymous
timer Asked: Feb 23rd, 2016

Question description

Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow:
 Direct
Labor-Hours
per unit
Annual
Production
 Rims0.40  19,000 units  
 Posts0.20  82,000 units  
Additional information about the company follows:
a. Rims require $16 in direct materials per unit, and Posts require $11.
b. The direct labor wage rate is $15 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 MeasureEstimated
Overhead
Cost
RimsPostsTotal
 Machine setups Number of setups$25,000  92  80  172  
 Special processing Machine-hours$180,000  3,900  0  3,900  
 General factory Direct labor-hours$289,000  7,600  16,400  24,000  

I figured out the activity rate for each activity cost pool, which is:


Machine Setups: 145.35/setup

Special processing: 46.15/MH

General Factory: 12.04/DLH


Now, i need to determine the unit product cost of each product according to the ABC system of the following:


 Unit product cost of Rims

 Unit product cost of Posts




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