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Computing ABC Product Costs

Performance Products Corporation provides 2 assets, titanium Rims and also Posts. Data concerning the 2 assets follow:

 Direct Labor-Hours Per Unit Annual Production Rims 0.40 .20,000 units Posts 0.20 80.000 units

More indevelopment around the company follows:

a. Rims call for \$17 in direct material s per unit. and Posts require \$10.

You are watching: Determine the unit product cost of each product according to the abc system

b. The direct labor wage rate is \$16 per hour.

c.. Rims are even more complicated to manufacture than Posts, and also they need unique equipment.

d.. The ABC mechanism has actually the complying with task cost pools:

Required:

1. Compute the task price for each task expense pool.

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2. Determine the unit price of each product according to the ABC system, consisting of straight products and also direct labor.

1)

Activity rates are computed as follows:

 Activity Cost Pool (a)Estimated Overhead Cost (b) Expected Activity (a) ÷ (b) Activity Rate Machine setups \$21,600 180 setups \$120 per setup Special processing \$180,000 4,000 MHs \$45 per MH General factory \$288,000 24,000 DLHs \$12 per DLH

Alternative ISBN: 9780077317768, 9780077317775, 9780077317782, 9780077317843, 9780077317850, 9780077420147, 9780077551544, 9780077629595, 9780077773304, 9781259249860
Alternate ISBN: 9780077317768, 9780077317775, 9780077317782, 9780077317843, 9780077317850, 9780077420147, 9780077551544, 9780077629595, 9780077773304, 9781259249860
Managerial Accounting (14th Edition) Edit editionSolutions for Chapter 7Problem 12E: Computing ABC Product CostsPerformance Products Corporation provides two products, titanium Rims and also Posts. File regarding the 2 products follow: Direct Labor-Hours Per UnitAnnual ProductionRims0.40.20,000 unitsPosts0.2080.000 unitsAdditional information around the firm follows:a. Rims require \$17 in straight material s per unit. and also Posts need \$10.b. The straight labor wage price is \$16 per hour.c.. Rims are more facility to manufacture than Posts, and they require unique devices.d.. The ABC mechanism has actually the adhering to task price pools:Required:1. Compute the task price for each task price pool.2. Determine the unit cost of each product according to the ABC device, consisting of straight materials and direct labor.…