Required information

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

Skip to question

[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	0.30	29,000 units
Posts	0.20	86,000 units

Additional information about the company follows:

Rims require $18 in direct materials per unit, and Posts require $14.

The direct labor wage rate is $16 per hour.

Rims are more complex to manufacture than Posts and they require special equipment.

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	$	42,140	100	100	200
Special processing	Machine-hours	$	131,580	2,000	0	2,000
General factory	Direct labor-hours	$	1,479,000	9,000	78,000	87,000

Exercise 4-8 Part 2

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.)