following information applies to the questions displayed below.j rmance Products Corporation makes two products, titanium Rims and P IS ts Direct Labor- Hours per unit 0.70 0.80 Annual Production 26,000 units 90,000 units tional information about the company follows: ns require $14 in direct materials per unit, and Posts require $10. e direct labor wage rate is $20 per hour. ms are more complex to manufacture than Posts and they require special e ABC system has the following activity cost pools: Estimated Estimate
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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[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:
Rims
Posts
Direct Labor-
Hours per unit
0.70
0.80
Annual
Production
Additional information about the company follows:
a. Rims require $14 in direct materials per unit, and Posts require $10.
b. The direct labor wage rate is $20 per hour.
Activity Cost Pool
Machine setups
Special processing
General factory
26,000 units
90,000 units
c. Rims are more complex to manufacture than Posts and they require special equipment.
d. The ABC system has the following activity cost pools:
Unit product cost of Rims
Unit product cost of Posts
Activity Measure
Number of setups
Machine-hours
Direct labor-hours
Estimated
Overhead Cost
$ 33,300
$ 172,800
$ 858,000
Estimated Activity
Rims
70
3,000
18,200
Posts
230
0
72,000
Total
300
3,000
90,200
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.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F10642695-f55e-45e2-a059-6bb180bcb35d%2Fde41e8ab-bf16-45f2-997f-007785760000%2Flwqoo7_processed.jpeg&w=3840&q=75)
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