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Exercise 4-8 (Algo) Computing ABC Product Costs [LO4-2, LO4-3]

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Performance Products Corporationmakes two products, titanium Rims and Posts. Data regarding the two products follow:

	Direct Labor-Hours per unit	Annual Production
Rims	0.80	19,000 units
Posts	0.60	86,000 units

Additional information about the company follows:

1. Rims require $13 in direct materials per unit, and Posts require $9.
2. The direct labor wage rate is $15 per hour.
3. Rims are more complex to manufacture than Posts and they require special equipment.
4. The ABC system has the following activity cost pools:

Activity Cost Pool	Activity Measure	Estimated Activity
Estimated Overhead Cost	Rims	Posts	Total
Machine setups	Number of setups	$ 39,560	80	120	200
Special processing	Machine-hours	$ 140,180	2,000	0	2,000
General factory	Direct labor-hours	$ 532,000	15,200	51,600	66,800

Exercise 4-8 (Algo) Part 1

Required:

1. Compute the activity rate for each activity cost pool.

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.)