Question: Exercise 3-8 Computing ABC Product Costs [LO3-2, LO3-3] [The following information applies to the questions displayed below.] Performance Products Corporation makes two products, titanium Rims
Exercise 3-8 Computing ABC Product Costs [LO3-2, LO3-3]
[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 | Annual Production | |
| Rims | 0.60 | 22,000 units |
| Posts | 0.20 | 80,000 units |
| 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 $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 Measure | Estimated Overhead Cost | Rims | Posts | Total | |
| Machine setups | Number of setups | $ | 27,200 | 120 | 280 | 400 |
| Special processing | Machine-hours | $ | 130,400 | 5,000 | 0 | 5,000 |
| General factory | Direct labor-hours | $ | 1,056,000 | 5,000 | 61,000 | 66,000 |
Exercise 3-8 Part 1
| Required: | ||||||||||||||||||||||||||||||||||||||||||||
| 1. | Compute the activity rate for each activity cost pool. (Round your final answers to 2 decimal places.)
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Exercise 3-8 Part 2
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