Required information [The following information applies to the questions displayed below.] Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow: Annual Production 26,000 units 88,000 units Additional information about the company follows: a. Rims require $20 in direct materials per unit, and Posts require $18. b. The direct labor wage rate is $18 per hour. Rims Posts Direct Labor- Hours per unit 0.40 0.60 c. Rims are more complex to manufacture than Posts and they require special equipment. d. The ABC system has the following activity cost pools: Activity Cost Pool Machine setups Special processing General factory Unit product cost of Rims Unit product cost of Posts Activity Measure Number of setups Machine-hours Direct labor-hours Estimated Overhead Cost $ 28,160 $164,560 $ 780,000 Estimated Activity Rims 110 2,000 10,400 Posts 90 0 52,800 Total 200 2,000 63,200 2. 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.)
Required information [The following information applies to the questions displayed below.] Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow: Annual Production 26,000 units 88,000 units Additional information about the company follows: a. Rims require $20 in direct materials per unit, and Posts require $18. b. The direct labor wage rate is $18 per hour. Rims Posts Direct Labor- Hours per unit 0.40 0.60 c. Rims are more complex to manufacture than Posts and they require special equipment. d. The ABC system has the following activity cost pools: Activity Cost Pool Machine setups Special processing General factory Unit product cost of Rims Unit product cost of Posts Activity Measure Number of setups Machine-hours Direct labor-hours Estimated Overhead Cost $ 28,160 $164,560 $ 780,000 Estimated Activity Rims 110 2,000 10,400 Posts 90 0 52,800 Total 200 2,000 63,200 2. 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.)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 4CE: Larsen, Inc., produces two types of electronic parts and has provided the following data: There are...
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