Performance Products Corporation makes two products, titanium Rims and Post Direct Labor- Hours per unit Annual Production 29,000 units 0.30 Rims Posts 0.20 86,000 units Additional information about the company follows: a. Rims require $18 in direct materials per unit, and Posts require $14.
Performance Products Corporation makes two products, titanium Rims and Post Direct Labor- Hours per unit Annual Production 29,000 units 0.30 Rims Posts 0.20 86,000 units Additional information about the company follows: a. Rims require $18 in direct materials per unit, and Posts require $14.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![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:
Direct Labor-
Hours per unit.
0.30
0.20
Rims
Posts
Additional information about the company follows:
a. Rims require $18 in direct materials per unit, and Posts require $14.
b. The direct labor wage rate is $16 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:
Activity Cost Pool
Machine setups
Special processing
General factory
Annual
Production
29,000 units
86,000 units
Unit product cost of Rims
Unit product cost of Posts
Activity Measure
Number of setups
Machine-hours
Direct labor-hours
Estimated
Overhead Cost
$ 42,140
$ 131,580
$ 1,479,000
Estimated Activity
Rims
100
2,000
8,700
Posts
100
0
17,200
Total
200
2,000
25,900
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%2F6338f29c-038e-4203-a71b-73996700c81e%2F537d15f3-ed62-4e8d-bd02-f262d37092f5%2Fn26bbaq_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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:
Direct Labor-
Hours per unit.
0.30
0.20
Rims
Posts
Additional information about the company follows:
a. Rims require $18 in direct materials per unit, and Posts require $14.
b. The direct labor wage rate is $16 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:
Activity Cost Pool
Machine setups
Special processing
General factory
Annual
Production
29,000 units
86,000 units
Unit product cost of Rims
Unit product cost of Posts
Activity Measure
Number of setups
Machine-hours
Direct labor-hours
Estimated
Overhead Cost
$ 42,140
$ 131,580
$ 1,479,000
Estimated Activity
Rims
100
2,000
8,700
Posts
100
0
17,200
Total
200
2,000
25,900
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.)
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